2nd Quarter 2024 Client Letter
I hope you and your family members are enjoying the start of Summer. Some may be seeking coolerweather as they travel with the recent heat advisories taking over the US. As we discuss the heat trendthe US market has rallied once again due to strong Q1 earnings powered by AI driven technology andexpectations that the FED would begin cutting interest rates before year-end.
The S&P500 is currently sitting at an all time high, as signs of inflation slowing give stock investors hopefor a lower interest rate environment in the coming quarters. If your read my prior client letters, Iindicated a potential one rate cut for the year, down from the 5-6 cuts many analysts predicted for2024.
Given the current economic backdrop, and the Fed’s bias toward cutting interest rates, we believe thatthe Fed is on the side of the investor. Regardless of the magnitude or timing, the bottom line is the Fedis not raising rates and is looking for the right moment to cut… The three tactical rules previouslymentioned are intact.
Don't Fight the Fed
We are constantly analyzing the actions and intents of policymakers in both the US and abroad. Ifpolicymakers are clearly intent on achieving a result, while markets often doubt their resolve or theirability to achieve that result, we take them seriously.
Don't Fight the Trend
We try not to fight powerful trends, even if we think they may ultimately be proved wrong. We live byJM Keynes observation that “markets can stay irrational longer than you can stay solvent.”
Beware the Crowd at Extremes
As we mentioned above, if an extreme can be identified, especially when our Price Matters® workconfirms this extreme (stocks in the late 1990s, real estate in the late 2000s), then we need to be willingto lean the other way and to act aggressively once the trend changes.
All investments in securities, including the strategies and methodologies discussed above and below,include a risk of loss of principal (invested amount) and any profits that have not been realized. Marketsfluctuate substantially over time, and have experienced increased volatility in recent years due to globaland domestic economic events. Performance of any investment is not guaranteed.
I believe every solid relationship should center on open communication. You have several options toaccess the information you need to know about your portfolio, my firm, Raymond James and thefinancial markets. In addition to our in-person meetings and one-on-one calls, we'll also communicatewith you through other channels, such as our website, newsletters and social media. You have alreadybeen receiving regular updates and emails from me. These communications are designed to provide youwith insight into the ever-evolving financial markets and help build the confidence that comes fromworking with an experienced advisory team. If you haven't already done so, I encourage you to go to mywebsite to learn more about my firm and access some of the recent research and articles available toyou. I also utilize social media channels such as Linkedln. If you already have an account on Linkedlnconsider following me. These channels provide an excellent way for me to keep you up to date withrelevant, timely news. Please let me know how you prefer to receive important communications andhow frequently. We'll do our best to deliver. Guiding you toward financial independence is acollaborative process, and I hope you feel comfortable reaching out to me whenever you havequestions, 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.