3rd Quarter 2023 Client Letter

A Tale of Two Economies

I hope you and your family members are safe and healthy and ready for Fall. It was an exciting Summer for many as people resumed travel. Many traveled overseas and enjoyed cruising and touring. While others visited family and friends that were unable to travel in the past 3 years.

This past quarter has been a "good news, bad news" story for investors. The good news: until a tough September, major equity indexes largely defied the odds and delivered better returns despite widespread predictions of recession. The bad news the market improvement was very narrow favoring a select few technology stocks. Financial markets continue to hope for the end of the Fed's rate hiking cycle, while the economic date has been mixed without any clear signal. Hence, the focus remains on corporate America's ability to adapt to the new economic reality, and thus the stability of earnings. Over the past two months we have seen a big change in crowd sentiment, while the Fed and the trends have been steady.

Three rules to keep in mind.

Don't fight the Fed: Fed is prepared for additional hikes, despite inflation easing.
Don't fight the trend: lower inflation, improving growth and improving earnings.
Beware of the crowd at extremes: We regard crowd sentiment as the contrary indicator, since the beginning of the year the crowd has been either neutral or in extreme pessimism as investors attempted to handicap and navigate the evolving monetary policy landscape.
Warren Buffett once said that it's wise for investors "to be fearful when others are greedy and to be greedy only when others are fearful."

In conclusion, stay focused on the long term, we foresee the FED will be proven correct and interest rates will likely need to go higher to combat inflation. As this plays out, equity and bond investors should expect volatility and range-bound markets, before resolving to the upside at some point.

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 firm, 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 firm 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.