Client Newsletter Q3 2023
Dear Friends,
As I look outside my fifth-floor office window, my view extends beyond the expressway to the beautiful Botanic Gardens, where the autumn leaves serve as a gentle reminder that winter is approaching. An undeniable truth is that change is a constant in both the markets and our lives. The 3rd quarter was a bit rocky with the S&P and Dow down, however, both indexes are higher year to date.
As of this writing, Israel is defending itself from the brutal attacks and air strikes from Hamas. Our sincere thoughts and prayers are with the families and friends who live in Israel or have relatives impacted by this terrible war. Additionally, we are closely following the conflict in Ukraine and its influence on global oil prices. Wars and production cuts from OPEC have caused prices to spike, but if shipping lanes become compromised, the price of oil could skyrocket. If prices stay higher for longer, it will hamper growth, which may influence the Fed to lower rates at a faster clip.
The reason behind the market’s August and September slowdown was mainly due to rising interest rates and concern that the Fed would keep rates higher for longer. The Fed’s hint that another rate increase, with no plans to cut much in 2024, disappointed the market. Keep in mind that rates have been abnormally low for the past 15 years and this is more of a normalization process. We expect rates to stay higher for longer.
The good news is markets tend to perform well in the fourth quarter, historically. Every year since 1950, when the fourth quarter was preceded by consolidation in stock prices during August and September, the fourth quarter was positive. While history doesn’t always repeat itself, we anticipate a strong finish to the year.
As you are aware, TD Ameritrade and Charles Schwab have merged, combining all accounts under the Charles Schwab umbrella. We are committed to remaining your trusted advisor and now offer enhanced services such as charitable giving through Donor Advised Funds. In response to your valuable feedback and the enhanced client portal provided by Schwab, we have made the decision to discontinue mailing quarterly reports. If you prefer to continue receiving paper reports via mail, please contact Deana Lewis at 847.897.8114 or email dlewis@moonstoneasset.com.
For now, it is a great time to take any excess cash and put it to work in high yielding fixed income or money market funds. Schwab offers several money market funds yielding over 5% currently, with no lock up period or redemption fee. This is a great alternative to stashing cash in a bank account earning less than 1% interest.
As we approach the holiday season, remember the love and abundance that surrounds us. As always, if you anticipate changes to your personal financial situation or would like to review your portfolio, please do not hesitate to reach out.
Warmly,
Investment Advisory services offered through Moonstone Asset Management, Inc. a registered investment adviser
Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.
This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.