Seamark View
INVESTMENT MARKET OVERVIEW
4TH Quarter, 2023
Prepared by
R. William Blasdale
January, 2024
Here are the indices that we typically review (please see Note #1 below):
12-mos
Blackrock iShares Indices 2022 % 2023%
|
Russell 1000 (Domestic Large Cap): |
-19.19 |
26.41 |
|
Russell 1000 Large Cap Growth |
-29.31 |
42.60 |
|
Russell 1000 Large Cap Value |
-7.74 |
11.36 |
|
Russell 2000 (Domestic Small Cap Stocks): |
-20.48 |
16.84 |
|
Russell 2000 Growth |
-26.26 |
18.52 |
|
Russell 2000 Value |
-14.75 |
14.57 |
|
Russell Mid Cap |
-17.47 |
17.06 |
|
Russell Mid Cap Growth |
-26.90 |
25.71 |
|
Russell Mid Cap Value |
-12.28 |
12.54 |
|
MSCI EAFE (International Stocks): |
-14.35 |
18.40 |
|
MSCI Emerging Markets: |
-20.56 |
8.99 |
|
Fixed Income (Core US Aggregate Bond): |
-13.02 |
5.65 |
|
Fixed Income (National Municipal Bond) |
-7.35 |
5.56 |
To paraphrase Charles Dickens, these results are truly a “Tale of Two Markets!” I frankly can’t remember a starker contrast in results from one year to the next. And this despite a world riven by war and, at least domestically, political division and dysfunction. While the first 9-months of 2023 were far better than 2022, all investment markets really took off in the 4th quarter. What happened? Well, there’s an old saying in investing: “don’t fight the FED.” Earlier in the year, markets were reacting to a series of increases in the “Fed Funds” rate that started in March of 2022 when the range was 0.25%-0.50% through July 26th of 2023 when they topped out at 5.25% to 5.50%. Investment markets almost always react adversely to interest rate increases - hence the disaster of 2022. As 2023 unfolded, however, it appeared that inflation was coming down and the economy remained strong - the much desired “soft landing.” As we entered the 4th quarter, it became clear that not only were the rate increases over, but also there was a very real possibility of interest rate cuts in 2024. And the markets went on a tear, resulting in an incredibly strong 4th quarter and a wonderful year.
Domestic Large Cap stocks continued to lead the way, and the “growth” stocks continued to outshine the “value” stocks. Hidden in the larger averages, however, is the fact that only seven stocks (the “Magnificent Seven,” in order of market cap: Apple, Microsoft, Google, Amazon, Nvidia, Meta and Tesla) were responsible for a large part of the market gains. To give you an idea of the impact: the aggregate market value of these stocks is @$11.7-trillion, roughly equal to the market capitalization of the UK, Japan and Canada combined! Obviously, this is a trend that bears watching. Other segments of the investment markets also turned in impressive results, with Domestic Small Cap and International stocks doing very well and even sleepy old bonds finally landing solidly in the black.
All this inevitably brings us to the “where do we go from here?” question. As always, there is lots of uncertainty surrounding this question, but it is particularly intense as we enter 2024: how will the wars in the Middle East and Ukraine proceed? will the US government shut down once again because of political dysfunction? how disruptive will the heated invective surrounding the November election be, and will our democracy hold if someone doesn’t like the results? I could go on, but there’s plenty of turmoil out there that is, sadly, masking the fact that the US economy is fundamentally strong.
In the midst of uncertainty, we believe in falling back on what we know to be true: over time, an appropriately diversified portfolio of high-quality investments will win the day. To that end, we will be conducting our annual portfolio reviews and rebalancing during the 1st quarter, and we will be having individual discussions with everyone. In the meantime, as always, Lynne and I welcome a discussion of your questions and/or concerns at any time, and we continue to be most grateful for your continued confidence.
And once again, in closing, a brief word of warning: “phishing” scams (where you receive a text, email or phone call purporting to be from your bank, internet provider, etc. and requesting you to “sign here” or “click this link”) are proliferating. NEVER EVER DO IT!! If you think it may be legitimate, call the provider at the number on your most recent statement and check to see if it’s real.
Warmest best wishes for a happy, healthy New Year!
R. William Blasdale
January 8, 2024
Note #1: We are now reporting the various indices using the corresponding iShares ETF’s from BlackRock. We believe that this
is a better representation of actual returns that an investor could achieve. In most cases, they are very close to the
respective indices.
DISCLOSURES
This presentation is not an offer or a solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable; however, its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. This presentation may not be construed as investment advice and does not give investment recommendations. Any opinion included in this report constitutes the judgment of Seamark Financial Services, Inc. (Seamark) as of the date of this report and are subject to change without notice.
Additional information, including management fees and expenses, is provided on Seamark’s Form ADV Part 2. As with any investment strategy, there is potential for profit as well as the possibility of loss. Seamark does not guarantee any minimum level of investment performance or the success of any portfolio or investment strategy. All investments involve risk (the amount of which may vary significantly) and investment recommendations will not always be profitable. The investment return and principal value of an investment will fluctuate so that an investor’s portfolio may be worth more or less than its original cost at any given time. The underlying holdings of any presented portfolio are not federally or FDIC-insured and are not deposits or obligations of, or guaranteed by, any financial institution. Past performance is not a guarantee of future results.
Presentation is prepared by: Seamark Financial Services, Inc.
(508) 758-6159 www.seamarkfinancial.com Copyright © 2016, by Seamark Financial Services, Inc.