1st Quarter 2023 Client Letter

Signaling Neutral for Now, But Improving

I hope you and your family members are safe and healthy and ready for fabulous Spring weather.

Financial markets have been volatile all year as investors have worried about inflation, rate hikes, a banking crisis(second largest bank failure in U.S. history) and recession. During this time there are three investment rules of “Don’t Fight the Fed”, “Don’t Fight the Trend”, and “Beware of the Crowd at Extremes” have each fluctuated individually, but when combined have given a neutral reading. The S&P 500 has been ‘range-bound’ between 3800-4200 during this time; however, the market’s resilience in the face of so much uncertainty has shown signs of improvement. This does not rule out potential volatility if the FOMC continues to increase interest rates or geopolitics rise again.

Stocks have persistently operated under the thesis that the Fed would cut interest rates in the second half of the year, which would help stocks. The bond market on the other hand has constantly predicted that the Fed would slow the economy too much, which would result in a recession. While the ending of the story is yet to be written, one thing is clear: financial markets are fighting the Fed at every turn, in our opinion. While we like being patient today, if U.S. rates can indeed find a stable range in the coming months; that would likely mark the moment investors should feel the bear market tiring and a new bull market emerges. Since 1928, the S&P 500 has experienced 21 bear markets (not including the current downturn). That's approximately one every 4.5 years, on average and the average length of a bear market is 388 days.

While we don't know exactly how long this market slump will last, we do know that things will get better.

I believe every solid relationship should center on open communication. You have several options to access the information you need to know about your portfolio, my organization, Raymond James and the financial markets. In addition to our in-person meetings and one-on-one calls, we'll also communicate with you through other channels, such as our website, newsletters and social media. You have already been receiving regular updates and emails from me. These communications are designed to provide you with insight into the ever-evolving financial markets and help build the confidence that comes from working with an experienced advisory team. If you haven't already done so, I encourage you to go to my website to learn more about my organization and access some of the recent research and articles available to you. I also utilize social media channels such as Linkedln. If you already have an account on Linkedln consider following me. These channels provide an excellent way for me to keep you up to date with relevant, timely news. Please let me know how you prefer to receive important communications and how frequently. We'll do our best to deliver. Guiding you toward financial independence is a collaborative process, and I hope you feel comfortable reaching out to me whenever you have questions, concerns or even new ideas to help me better serve you.

Regards,

Elliot Weissmark, CFP^®, CPFA

Senior Vice President, Investments

Any opinion are those of Elliot Weissmark, CFP @, CPFA and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® in the United States, which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements.