When removing housing costs from CPI (blue line), inflation is running below 2%<\/em><\/strong><\/p>\n\n\n\n And we think there\u2019s better news ahead. Because shelter costs include tenants\u2019 rent (making up 7.7% of CPI) \u2013 and because this data is reported on a lag and includes new and existing leases \u2013 we expect more softening ahead. According to Zillow, rent growth has declined to 3.3% through November, which is lower than the average rent increase in the two years preceding the pandemic.<\/p>\n\n\n\n What the Market Showed Us in 2023 to Prepare for the New Year<\/a><\/span><\/strong><\/p>\n\n\n\n The economy and markets in 2023 prompted us to consider a few other classic lessons, and in our free December 2023 Zacks Market Strategy Report<\/a><\/span><\/strong>, we look back at some of these and why they are important for any investor to keep in mind.<\/p>\n\n\n\n Download your free report now for our insights on 2023’s lessons including:<\/p>\n\n\n\n \u2022 Don’t overwatch the Fed If you have $500,000 or more to invest and want to learn more, download your guide today!<\/p>\n\n\n\n Download Our Exclusive \u201cDecember Market Strategy Guide\u201d3<\/sup><\/a><\/span><\/strong><\/p>\n\n\n\n Stock Ownership in America Reaches All-Time High<\/strong> \u2013 The pandemic reshaped the global economy and altered the way we live and work in many ways. But it also made a significant impact on how many Americans invest. According to a triennial Federal Reserve survey, a record 58% of American households own stocks in some form, mainly in retirement accounts. But there has also been a strong uptick in the number of small individual brokerage accounts that households have opened, thanks in large part to the confluence of stimulus dollars and the elimination of commission fees on stock trading across U.S. brokerages. According to the survey, direct stock ownership rose from 15% of families in 2019 to 21% of families in 2022, which marked the biggest jump since the survey began in 1989. To be fair, not all investors are long-term oriented, and in many cases, individuals are trading as a hobby or to try to \u2018get rich quick.\u2019 But the high-level takeaway here is a positive, in our view. If more Americans are buying stocks, that\u2019s a good thing.4<\/sup><\/p>\n\n\n\n Could Red Sea Attacks Snarl Supply Chains All Over Again?<\/strong> \u2013 The Red Sea occupies a critical sliver of water, separating the Mediterranean Sea and the Indian Ocean, where 12% of the world\u2019s seaborne oil, 8% of its liquified natural gas, and 20% of all container trade pass through. It is not an exaggeration to call it one of the world\u2019s most valuable trade routes. But recently, shipping companies have been rerouting vessels and getting worried about commercial traffic there, as recent attacks on merchant vessels by Houthi forces in Yemen have sparked fears that cargo and personnel could be in danger. The shipping giant A.P. Moller-Maersk announced it would reroute vessels around the Cape of Good Hope in Southern Africa, which adds time and cost to the movement of goods. It follows that higher prices for goods and energy could add to inflation concerns globally. This is a risk worth watching. So far, the U.S. has stepped in with a multinational naval force to protect vessels, which market watchers are hoping will deter future attacks.6<\/sup><\/p>\n\n\n\n Preparing to Invest in 2024<\/strong> \u2013 2023 has been an eventful year for the economy and markets. To sum up some of the most important developments, we dusted off some classic investing lessons to prepare investors for what\u2019s to come.<\/p>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2023\/12\/pic-2-1-1024x350.png\")
\u2022 Don’t chase heat (The “Magnificent 7” stocks that pulled markets higher
\u2022 Don’t fear volatility
\u2022 Plus\u2014Earnings estimates are now flat for Q4\u2014is the feared earnings recession coming back?<\/p>\n\n\n\n![\"\"](\"https:\/\/zacksim.com\/blog\/wp-content\/uploads\/2023\/12\/pic-1-4-1024x683.png\")