1st Quarter 2024 Client Letter

Artificial intelligence Humans and machines: a match made in productivity heaven.

This was the quarter of AI. If a company announced new developments in AI and/or significantly improving their products using AI, they received a premium to the stock price when reporting earnings this quarter. Thankfully “price matters’, but so does macro and earnings data.

With favorable economic and earnings tailwinds, this past quarter has been the best equity performance since 2019. We believe that the overall equity markets are still attractive in the short and medium term. From a longer-term perspective, we see limits to returns for large-cap US equities as an asset class, opening the door for potential relative outperformance from other market segments. With the recent FOMC(FED) comments on when potentially starting to reduce interest rates the market rally has broadened. We do not think the rate cuts initially reflected in the markets at the beginning of the year (6) will amount to more than 2-3 this year. When they do begin to cut interest rates it will also help the credit markets(bonds) and banks.

We should anticipate some volatility as the markets adjust to the possibility of less or no rate cuts.

In recent months some have asked what is artificial intelligence. I hope the next few paragraphs will offer some insight.

AI is a machine’s ability to perform the cognitive functions we associate with human minds, such as perceiving, reasoning, learning, interacting with the environment, problem solving, and even exercising creativity. You’ve probably interacted with AI even if you don’t realize it—voice assistants like Siri and Alexa are founded on AI technology, as are some customer service chatbots that pop up to help you navigate websites.

Applied AI—simply, artificial intelligence applied to real-world problems—has serious implications for the business world. By using artificial intelligence, companies have the potential to make business more efficient and profitable. But ultimately, the value of AI isn’t in the systems themselves. Rather, it’s in how companies use these systems to assist humans—and their ability to explain to shareholders and the public what these systems do—in a way that builds trust and confidence.

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.