Can you believe we are already at the end of the year?
At the beginning of 2023, I suggested that this year would be volatile, and that the market would end slightly up. As we round out the end of October, the market is holding on to slight gains, and many of our clients have found opportunity with bond exposure. We also had a nice rally mid-year, especially with The Magnificent 7: Apple, Netflix, Facebook, Tesla, Nvidia, Microsoft and Amazon.
Where are we now? It appears the Federal Reserve is done, or nearly done, raising rates. Over the past few weeks we have seen the long end of the yield curve go up. We have been in an environment of short yields being higher than longer yields, and that appears to be correcting. This may cause short-term uncertainty however, the yield curve will eventually normalize.
If the Federal Reserve stops raising rates and the yield curve moves to normal, we can expect 2024 to be an average or above-average year for the markets. Of course, with anything related to investing there are uncertainties, and we all know how the markets hate uncertainties. National and international unrest can affect market outcomes, especially in an election year. However, if we work through these issues, market results should be positive. In the meantime, my suggestion is to stick to yields and slowly start adding high quality market exposure now or in the near future.
On a personal note, my family, team and clients seemed to really enjoy our annual client event. Thank you for attending, and thank you to El Charro for hosting. We are already at work on next year’s event and will keep you posted. In the meantime, please enjoy a few photos of the staff and my family from that day. We appreciate your business and loyalty to the firm.
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