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“Coming into 2022, the economy and equity markets were on quite a tear… On the back of high corporate earnings, low unemployment, historically low interest rates, almost no inflation, and unprecedented government intervention throughout the pandemic, we saw the S&P 500 return roughly 31% in 2019, 18% in 2020, and 28% in 2021 in consecutive years.”

As we wind down the year that was 2023, I wanted to pen some things that were NOT market or investment garblings. We will save that for the 2024 January ranting. Wanted to wish everyone well with the Holidays (cap letter intended) and whatever religious or spiritual doctrine you follow, may it be wonderful as we round out 2023! Wanted to end the year with some nuggets (or a think about list) for the new year’s resolutions. Keeping in the lane, here are a list of “things everyone should do” in the new year. Maybe as you toast the fireworks, you think about these as resolutions….

The roller coaster ride continues. Several weeks ago, we highlighted the ups and downs of markets over the past three years, with the primary driver coming down to interest rates and monetary policy. As interest rates have moved, so have markets. With the Federal Reserve rapidly raising short-term interest rates from 0 to 5%, a large portion of the investable market went into shock. Outside of the mega tech names (Microsoft, Apple, Tesla, Apple, Google, and Nvidia), much of the market was left behind.

For many, the traditional pension has become a relic of the past, as employers over the last 15 years have actively tried to distance themselves from the financial burdens associated with the obligation. The costs and commitments tied to pensions proved to be too overwhelming for most companies and continue to be phased out. Fortunately, for NHL players and on-ice officials, the pension remains a robust and integral part of their compensation package, firmly entrenched in the CBA for the foreseeable future.

Despite low unemployment, a growing GDP, double-digit gains in equity markets, and decreasing inflation, the current state of markets is undeniably disconcerting.

Over these past many months, as inflation has been a thing, and interest rates rise, we have discussed the actions and direction that the Fed has taken to slow things down. Ultimately, we believe the central bank will win and that inflation will be driven back to its “acceptable range” of 2 percent. What we have not discussed is the fallout to people in real time as these things unfold. Money is like economic oxygen and its cost going up will have a detrimental effect for those on the wrong side. Let’s dig deeper….

“The best prophet of the future is the past”.

                                                                                 Lord Byron

“Markets are efficient. People are not”.

                                                                                  Peter Lynch

“There is nothing new in the world except the history you do not know”.

                                                                                  Harry S. Truman

“3 yards and a cloud of dust”…. A football saying but an appropriate one for today’s economic environment. We have rallied significantly (on the major indexes) from the market bottom of almost a year ago but remain stalled in a range of between 5 and 8 percent from the recent July high water mark. Up one day and down the next, not really making forward progress. Not unexpected given the voracity of the recovery so far this year. Markets (healthy ones at least) are not linear and tend to “stair step” in ranges. This one is no different.

The past three and a half years have been an incredibly tumultuous journey for all. We've navigated through a series of unprecedented events. In no particular order, there was a global pandemic, international war, contentious election cycle, inflation at a 4-decade high, interest rates going from 0 to 5%, regional banking crisis, crypto fraud, meme stocks going bust, among various other significant developments that may have slipped my mind.

As the world grappled with the unprecedented challenges of the past few years, the global economy has experienced a roller-coaster ride, with investors feeling every bump along the way. Here is where we stand at the halfway point of 2023.