Quarterly Market Update 12.31.2023

Hi, Scott Campbell, your 401(k) advisor with my quarterly market update for the fourth quarter of 2023.

First, I want to wish everyone a happy and prosperous new year.

U.S. stock and bond markets performed very well in 2023, recovering from a horrendous 2022. Once again proving that not selling in turbulent times is always the best strategy. Your investment portfolio should always match your risk tolerance. If that is the case, there is no prudent reason to sell. If you are invested in a Retirement fund you are invested in a portfolio that matches your risk tolerance. The past two years, and all past crises prove that not selling is the best strategy.

The issues that caused all the havoc in 2022 obviously improved in 2023. The inflation rate has dropped. Which is not to say that prices have dropped, because they have not. The inflation rate measures the rate prices and wages increase. And prices have stopped increasing but they are still high. High prices cause people to spend a greater percentage of their income on necessities and less on fun things. That makes them unhappy. Which is why polls indicate people are not happy with the economy. Duh.

Because inflation is in check, the Federal Reserve has stopped raising interest rates. This is always good news for the stock market. It means that companies, especially tech companies, that need to borrow lots of money to grow can do so. Higher interest rates mean companies can not afford to borrow as much capital, which was the case in 2022.

Steady interest rates has been positive for the housing market which came to a standstill when interest rates started rising over a year ago. Higher interest rates require home buyers to buy less home. Which brings sales to a halt.

Employment remains strong. The economy is growing at a decent rate. The recession that was the talk of the town appears it will be very shallow, if it occurs at all. Things look for positive for the near term. Keep invested. Keep saving - and save more if you can.

Call me if you have any questions or need any help.