Author Archives: vlm

It may only be April, but investors find themselves under the sweltering heat of inflationary pressures. Inflation has been simmering over the past months, and Wednesday’s numbers suggest that the heatwave might intensify. The implications of hot inflation numbers extend far beyond the aisles of grocery stores; they have the potential to sizzle the stock market, sending shockwaves through portfolios and reshaping investment strategies.

The first quarter of the year witnessed a surge in inflation, fueled by a variety of factors ranging from supply chain disruptions to fiscal policies aimed at reviving economies. Central banks around the world have been closely monitoring these developments, yet the hot inflation numbers have persisted, posing a significant challenge to policymakers and investors alike.

So, how might these soaring inflation figures impact the stock market in the second quarter?

Investors are likely to experience increased volatility as inflationary pressures continue to mount. The beginning of April has been an example of this. Historically, periods of high inflation have been associated with greater market turbulence, as uncertainty surrounding future purchasing power erodes investor confidence. Stocks, particularly those in sectors sensitive to inflation such as consumer discretionary and industrials, may experience heightened fluctuations in prices as investors recalibrate their expectations and assess the potential impact on company earnings.

Moreover, rising inflation can exert downward pressure on stock valuations. As inflation erodes the real value of future cash flows, investors may demand higher returns to compensate for the diminished purchasing power of their investments. This could lead to a repricing of equities, particularly those trading at elevated valuations. Risk reward comes into play and investors may be less likely to buy stocks at inflated prices. Companies with pricing power and the ability to pass on increased costs to consumers may fare better than those operating in more competitive markets.

Inflation can also influence the decisions of central banks, with implications for monetary policy and interest rates. The Federal Reserve may adopt a more hawkish stance, signaling potential rate hikes. Remember, the market has priced in perfection which includes multiple rate cuts this year. Higher interest rates can have a cooling effect on economic growth and corporate profitability, as borrowing costs rise and consumer spending declines.

Despite the challenges, inflationary pressures don’t have to cook investors this quarter. As heightened volatility becomes likely, it is important to concentrate on your long-term financial goals during periods of short-term fluctuations. As a reminder, pullbacks and corrections are normal market movements, and we are overdue for both. Diversification in your portfolio can also help to manage risk. A diversified portfolio can help cushion against losses in any single investment or market segment. Your investment process can also have a significant impact on your overall performance. We employ a process that helps us determine what areas in the market are strengthening as well as weakening. We choose our areas accordingly. This allows us to stack the odds in our favor. Engaging a fiduciary advisor can help you make non-biased investment decisions during times of unsettled markets.

In conclusion, the impact of hot inflation numbers looms large over the stock market as we navigate the second quarter of 2024. While inflationary pressures may induce greater volatility and pose challenges to equity valuations, investors can adapt their strategies amid the turmoil. By adopting a disciplined approach, staying focused on long-term goals, and implementing sound investment strategies, investors can navigate the ups and downs of the market and position themselves for long-term success. If you have any questions, please reach out. We are always happy to help! Happy Spring.

ASHLEY ROSSER, PRESIDENT

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

In recent times, the stock market has been on a relentless climb, setting new highs and defying expectations. However, as the euphoria continues, concerns about excessive optimism, overbought conditions, and an extension from long-term moving averages are emerging. With the bulk of S&P 500 earnings now reported, the focus shifts to how the markets will stabilize. Despite the recent record-setting performance, some experts suggest that a correction in the coming month wouldn’t be surprising given the current overheated state of the market.

Investors find themselves at a crucial juncture, balancing the excitement of potential gains with the looming uncertainty of a market correction. In such times, the role of a fiduciary financial advisor becomes paramount. Unlike traditional advisors, fiduciaries are bound by a legal and ethical duty to act in their clients’ best interests, placing their financial well-being above all else.

How a Fiduciary Financial Advisor Can Help:

1. Objective Assessment: Fiduciary financial advisors are trained to provide an objective assessment of the market conditions. They analyze data, market trends, and economic indicators to offer an unbiased view of the current situation, helping clients make informed decisions.

2. Risk Management: Recognizing the potential for a market correction, fiduciaries work closely with clients to evaluate their risk tolerance and adjust their portfolios accordingly. They may recommend diversification strategies and asset allocation adjustments to minimize the impact of market volatility.

3. Long-Term Planning: Fiduciaries emphasize long-term financial goals rather than short-term market fluctuations. By focusing on a client’s overall financial plan, including retirement, education funding, and estate planning, they help build a resilient portfolio that can weather market storms.

4. Education and Communication: A key role of fiduciary financial advisors is to educate clients about market dynamics and the potential risks involved. They communicate transparently, ensuring clients understand the rationale behind investment decisions and helping them stay focused on their financial objectives.

5. Adaptability and Monitoring: Markets are dynamic, and fiduciaries understand the importance of adaptability. They continuously monitor portfolios, adjusting as needed to align with changing market conditions and clients’ evolving financial goals.

While the current stock market situation may be characterized by optimism, overbought conditions, and a potential for correction, partnering with a fiduciary financial advisor provides a solid foundation for navigating these uncertainties. Through objective assessment, risk management, long-term planning, education, and adaptability, fiduciaries strive to guide investors toward financial success while safeguarding their interests in both bull and bear markets. In times of market turbulence, the value of a fiduciary becomes even more apparent, offering clients the confidence and support they need to weather the storms of financial markets. If you are wondering if your portfolio could benefit from meeting with a fiduciary, we would love to sit down with you. While market valuations will change, our commitment to our clients remains unwavering. Have a wonderful March and we will see you next month!!

ASHLEY ROSSER, PRESIDENT

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

As the first month of the year ends, the broad markets closed the last trading day of the month up just 1% year to date. Markets had been optimistic through the third week of January, even reaching all new S&P 500 highs. This achievement was ahead of most analysts predictions that we would see new highs by mid-year 2024. However, the excitement began to wane during the last week. Investors have been eyeing the Federal Reserve’s stance on interest rates and were concerned by Jerome Powell’s statements on January 31. Hopes of a March interest rate cut were dashed as Powell gave his statement regarding possible cuts. “Based on the meeting today, I would tell you that I don’t think it’s likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that. But that’s to be seen,” Powell said. Markets responded accordingly by selling off, with the technology heavy index Nasdaq taking the biggest hit as it sold off over 2% for the day. The previous trading days had been marked by increased volatility as investors grew increasingly anxious about interest rates. Interest rates continue to be important because high rates affect corporate bottom lines, and bottom lines affect profits.

Unfortunately, we won’t get a reprieve in interest rates until inflation comes down to around 2%. The Federal Reserve is likely to take a more conservative stance regarding interest rate cuts after they got burned in late 2021 and 2022 when they thought high inflation would be transitory. They were surprised when it was higher and more persistent than expected. If inflation remains sticky, cutting interest rates too soon could undo much of the progress that we have made. Even better, if the Federal Reserve can achieve its ultimate goal of bringing down inflation without harming the economy (the elusive soft landing) this could even further bolster returns in 2024. So far the economy has remained resilient in the face of challenges. The job market remains strong, and our economic growth has kept us from recession so far.

In my opinion, the topics to watch will be interest rates and inflation for 2024. The sooner inflation decidedly falls, the sooner we will see interest rates begin to come down. The markets may continue to be tentative until they feel confident that interest rates will finally trend down later in the year. Until that happens, growth stocks may continue to experience heightened volatility. I am not saying to count them out, I am just saying we should pay close attention. We have investment rules for a reason. If we begin to see violations of our rules, we will respond accordingly. If you do not feel confident regarding your current portfolio rules, consider finding a fiduciary advisor who can help you establish an investment policy. If you have any questions, please give us a call. We are happy to help. Until next month we wish you a safe February.

ASHLEY ROSSER, PRESIDENT

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

2023 was a year of many challenges for investors. Aggressive interest rate hikes, fears of recession, regional banks collapsing, and increasingly sticky inflation required investors to stay on their toes. I wanted to recap where we have been, and where we may be headed for 2024.

In March, the market faced higher-than-expected inflation readings and rising rate hike expectations. This, coupled with the unexpected closing of two regional banks sparked widespread concern and the market quickly dropped about 9%. Stocks recovered quickly as investors became more comfortable with the banking sector risk being more localized than systemic. The soft-landing narrative also gained traction, and the S&P 500 performance was almost 17% by the end of June. At this time, technology was overbought, market leadership was particularly narrow, and valuations appeared full, given the economic backdrop. You may remember previous articles referencing the significant overconcentration in both the S&P and Nasdaq indexes as the “Big 7” continued to be the main driver of stock prices. If you did not have significant exposure to Apple, Amazon, Google, Meta, Tesla, Nividia, and Microsoft your portfolio returns were likely significantly muted as other areas of the market struggled to compete with them.

Markets finally took a breather as we entered the month of August and markets sold off for three consecutive months. As November came, we were in a double market correction as both the S&P 500 and Nasdaq were 10% off their previous highs. You may remember that this did not come as a surprise to us as I wrote in November “we were cautious of being overly optimistic in both August and September. In fact, most of our charts were flashing caution for weeks before the drawdown began. We were just waiting for the match to ignite the flame was silently being stoked for weeks.” Markets had gotten too hot too fast and needed to cool off to maintain the ability to eventually move higher.

Momentum arrived in November as evidenced by the 8.9% spike in the S&P 500, the largest monthly increase in 10 years.  November broke a streak of three consecutive down months for the S&P 500 and did so in style. We were wondering if there would be any room for the Santa Claus Rally after such a large positive move but December’s performance showed no coal for investors this year as the S&P 500 moved up nearly 4%. The S&P500 finished the year performing just over 26%. The index continues to be extremely concentrated leaving investors wondering how much further it could run in 2024.

While I have no crystal ball, I think market performance is going to greatly depend on whether the Federal Reserve decides inflation has cooled to a point that allows for interest rates to decrease. Lower interest rates and the Federal Reserve finding a way to stick the “soft landing” would allow for additional room to run, even in areas that are considered overvalued. Also, when we look at the age of our current bull market that was born in late 2022, history tells us we may see solid investment performance. Looking back at ever bull market in their second year, the S&P500 has gained an average of 12.6% and has been positive every time. So, the storyline exists that we could see a strong 2024. As we like to say, history doesn’t always repeat, but it usually rhymes. If you have any questions about your current portfolio or investment strategy, please give us a call. We would be happy to help. Happy New Year!

ASHLEY ROSSER, PRESIDENT

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

It’s the most wonderful time of the year…for the stock market? With all this potential recession talk that has lasted two years, you would expect a lump of coal to arrive in your Christmas stocking this year. But quite to the contrary, Santa Claus appears to have arrived early this year as evidenced by the 8.9% spike in the S&P 500 last month, the largest monthly increase in 10 years.  November broke a streak of three consecutive down months for the S&P 500 and did so in style. After the banner month of November, investors are hoping to see returns remain merry and bright.

The month of December already tends to be bullish; in pre-election years, the S&P 500 has been positive more than 72% of the time since 1950 with an average return of 2.9%. Historically, the strongest returns are often loaded into the second half of the month, hence the “Santa Claus Rally”. From a longer-term and historical perspective, higher returns are even more likely when they follow strong performance like we saw in November. As portfolio managers begin to window dress their funds for the upcoming new year, we may see the continued effects of the Santa Claus rally from the last five trading days of December through the first two trading days of January.

There are several plausible reasons for the jolly market movements in November. The Federal Reserve confirming their intention of pausing interest rate hikes certainly helped to excite investors. Since the Fed started hiking rates, inflation has declined meaningfully to 2.5% which remains just above the Fed’s 2% target. The downward movement in rates means lower and more attractive borrowing costs for business loans, mortgages, auto loans, credit cards and other debt vehicles. In addition, the most recent GDP (Gross Domestic Product) figure for the 3rd quarter came out at a blistering 5.2% growth rate. The economy continues to thrive, fueled by a strong labor market.

Will Santa return at the end of December? We will have to wait and see. The signs are pointing to markets regaining new highs as early as January. Also, seasonal market trends are often difficult to break but they are never definitive. Santa certainly left investors on the naughty list in 2022 when the S&P500 was down -5.9% for the month of December and closed out the year at -19%. Bah humbug. Despite ongoing narrow leadership and increased concentration in the growth indexes, 2023 is shaping up to be a much better year than the previous. As always, the time to make sure your portfolio is allocated properly is when everything is looking jolly. If you were uncomfortable during the month of October, you may be allocated too aggressively and can use last month’s run up to move into more conservative strategies. Making decisions based on emotions often lead to investors getting “Scrooged”. Your investment procedures should always be followed, regardless of which way the market is moving. If you have questions about your current portfolio or investment strategy, we are always happy to help. From Ashley and the team at Victory we wish you and your family Merry Christmas and a happy and healthy New Year!

ASHLEY ROSSER, PRESIDENT

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

Halloween might be over but the current stock market moves have some investors spooked. Last week, both the S&P 500 and the Nasdaq indexes moved into correction territory. In other words, we are starting off November in “double correction” territory. A double correction means both the S&P 500 and Nasdaq have fallen at least 10% from their most recent highs at the same time. From a psychological perspective, this can feel downright scary for investors. There is good news for investors, however. Did you know that if we look back for 50 years, the market has returned about 8% in the month following the correction? Corrections are painful to endure, but they often lead to a healthy recovery move upwards like a V. As I like to remind clients, the stock market can’t just move straight up. It’s more like a yo-yo being walked up a flight of stairs. The yo-yo is constantly moving up and down as it gradually makes its way up the stairs.

It’s also easy to forget how often corrections occur. We expect to see a decline of 10% about once every 8 months. They are a part of a normal functioning market; they just typically feel worse when we are amid one. There can often be signs of an overheated and overstretched market if you are paying attention. If you were reading my blogs and watching my videos over the summer, you will remember I was confident we were due for some type of cooldown after such a strong run up. If you haven’t had a chance, check out AUGUST and SEPTEMBER blogs. You will see why we were cautious of being overly optimistic in both August and September. In fact, most of our charts were flashing caution for weeks before the drawdown began. We were just waiting for the match to ignite the flame was silently being stoked for weeks.

As investors, should we just sit on our hands and hope that history will repeat itself this month? I always think corrections tell you a lot about whether your current portfolio is properly allocated. If you are feeling anxious every time you see your balance numbers fluctuate, you may be invested too aggressively. Also, if you have been sitting on the sideline waiting for “a better opportunity to buy”, this might be it. Portfolio managers will be rebalancing their funds soon in preparation of “window dressing” for the start of the new year. Next month we will be watching to see if the Santa rally is going to return at the end of the year. If you are not sure if your portfolio is working as best in your favor as possible, we would love to review it with you. Obviously, it’s impossible to know if we are going to have a strong November but while history never repeats itself, it often rhymes. Wishing you and yours a wonderful season of thanks this November.

ASHLEY ROSSER, PRESIDENT

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

The stock market is kicking off the spooky season in fashion after choppy trading led to a 3.2% S&P 500 decline for the third quarter. This was really not surprising as I stated in my September article. “As we are heading into the seasonally weaker part of the stock market cycle I would expect to see additional areas of pressure for the short term.” Coming into August markets had been running extremely hot and were deviated from their short- and long-term moving averages. It was only a matter of time before a cooling off period was inevitable. More importantly, in any given year, bullish or bearish, a 5-10% correction is entirely normal and healthy.

As October has a history of being a seasonally weak period, investors are hoping to see a resuming rally to lead us into the final quarter of 2023. One thing that may surprise you is how narrow the current market leadership has been. While the large cap growth indexes have been grossly positive as of the end of the quarter (S&P 500 13% and NASDAQ 35%), other indexes have not participated in the same performance. In fact, the bond and commodities indexes are all negative year to date while the Dow Jones and small cap indexes are just barely positive for the year. Mid-caps have not fared much better and are up about 2.61% as of quarter end. International has also not gained much traction and is up only 4.49% year to date.

This is compounded by how concentrated the S&P500 index remains. This is clearly evidenced by the stark difference in returns between the cap weighted and equal weighted S&P 500 returns. In a market-cap-weighted strategy, you end up owning more of the larger stocks because they have a greater weight in the index. In an equal weight strategy, you diversify across a broader range of securities and sectors within the index, buying the same amount of each company. Currently the cap weighted S&P 500 index is up 13.1% while the equal weight index is positive only .61% A significant percentage of year-to-date performance has been concentrated in only 7 stocks in both the S&P and Nasdaq. Essentially, if you missed those seven companies, you have missed most of the positive return year to date.

There is no doubt that this year has been a unique one for both the market and investors who are looking for the highest possible returns. This can create a fear of missing out, causing some to increase their concentrations of equities beyond what their typical risk tolerance would be. We would remind investors to not “chase performance” and to stick to their investment policy. It is important to not take on more risk than you are comfortable with, especially when some areas of the market have been running without taking pause. Your investment plan should include rules for your portfolio allocations. Follow those rules. Our main golden rule remains “let our winners run and cut our losers quick”. If you are concerned about whether your current investment plan is working, we would love to sit down and discuss this with you. We are always happy to help. Until next month, enjoy your first taste of the fall season.

ASHLEY ROSSER, PRESIDENT

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

Markets finally received their anticipated cooldown during the month of August. We discussed the markets extended run in our August article and the likelihood that we would see some cooling off in the next few weeks as markets were extremely overbought and extended. Right on time, we began to see selling pressure that started in the first week of August. By the time the third week of the month, the S&P 500 was down over 4%. There was a decent recovery in the final week of the month and markets ended only about 1.5% down. The question remains are markets now closer to realistic levels or should we expect more selling as we head into the fall.

As we are heading into the seasonally weaker part of the stock market cycle, I would expect to see additional areas of pressure for the short term. Inflation has become a concern once again as August PMI numbers came in hotter than expected. This will likely make it impossible for the Federal Reserve to consider cutting interest rates anytime soon. This is coupled with concerning international economic data that could possibly show cracks in the strength of global markets. However, we continue to see financial analysts downgrade their perceived risk of recession in favor for a soft landing. It’s an interesting dichotomy.

Despite headwinds, investor volatility remains very low. This means generally investors are unbothered by current market events. Everyone still believes that everything is fine. And it may very well be just fine, particularly in the intermediate term. However, I think it’s realistic to expect a few more bumps as we navigate through the rest of September and into October. Last month’s market activity brought RSI numbers down from their elevated extremes. RSI (or relative strength index) measure price movements of stocks. Anything above 70 is extremely overbought. We were at 69.7 on July 30th and are currently at 55. The pullback also has the S&P 500 trading much closer to it’s 50 day moving average. Both are signs that the extremely overheated market has cooled off at least slightly.

What does this mean for the investor? While we could certainly see a pickup in volatility during September, pullbacks to support could still be advantageous to add to equity exposure as needed. This is known as dollar cost averaging. With that said, there are certainly risks to remain mindful of. The risk of a recession from tighter financial conditions is one of them. This doesn’t mean you should avoid stocks but rather be cognizant of how much risk you are willing to take on and what time horizon exists between now and when you may need to use your investments. Review your investment policy for your portfolios and make sure you are following your rules. Remember, your investments should all have specific roles in your investment process. Once they fail to satisfy them, they need to go! As always, you can always give us a call at Victory if you have any questions. We are always happy to help. Have a great start to fall and we will be back in October.

ASHLEY ROSSER, PRESIDENT

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

Scorching temperatures are not the only areas that are heating up this summer. The stock market rally has continued to run hot, with no signs of slowing down in sight. The issue is, when does hot become “too hot?” When we look at the S&P500 and Nasdaq, there is a significant diversion from current levels and their moving averages. Notably, S&P 500 is trading 12.5% above its 200-Day Moving Average. While such does not imply an immediate correction, it does suggest that the upside may be more limited near-term. As a reminder, moving averages are as implied, the average price of a stock or fund. Those numbers can run diverged either higher or lower from their averages (sometimes for a long time) but eventually they will need to correct to a closer track. This is known as a reversion to the mean. Time can also allow averages to “catch up” to market performance but usually a combination of both time and correction is what brings markets back to closer alignment with their averages.

Also noteworthy is the length of the current rally. The S&P 500 is set to close out its fifth straight month of gains. In addition to being up six out of the seven months this year, returns are unusually high, with the S&P advancing 18% year-to-date. We must remember that market advances can only go so far before an eventual correction occurs. Sentiment also remains extremely bullish. “Everyone is on the same side of the boat”. No one expects the market run to slow down. That usually means that there will be at least a small correction in the short term. A pullback of 3-5% would certainly not be outside normal market movements and could be beneficial for markets as we head into the fall.

Earnings season continues to further bolster investor confidence. Two quarters of decently strong economic growth (2%+) seems to have put the word recession out of everyone’s minds. However, we know that portfolio stock risk increases the longer a run up continues. We also know historically August and September tend to be the weaker times of the year.

This leaves investors wondering what (if any) moves they should be considering as we prepare to close out the summer months. Selling your positions and moving to cash is not recommended but I do believe this is an important time to evaluate your portfolio positions as well as your investment philosophy. If you have not rebalanced all year, you may want to consider doing so now. This gives you the opportunity to trim back your winners to their original portfolio weights. You may also want to see if any of your positions are not working according to their original intension. We employ two main rules. “Let your winners run” and “Cut your losers quick”. The last consideration may be to deploy any cash on the sidelines systematically. This allows you to take advantage of market pullbacks to get better buying opportunities. While we know we can’t time the market exactly, we can use history to help guide our future moves to set odds in our favor. As always, if you have any questions about this month’s article, please give us a call. We are always happy to help. I hope you enjoy your final weeks of summer, and we will be back in September.

ASHLEY ROSSER, PRESIDENT

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.

As we enter those lazy, hazy days of summer, it’s hard to believe the first half of the year is behind us. It was a very interesting first six months from an investor standpoint. While the S&P 500 has had a very strong performance for the first two quarters, that does not necessarily show the entire picture. If you watched my video last month, I discussed areas that investors should at least be cognizant of. The first is the extremely narrow breadth that exists. In the S&P 500 we can attribute the positive performance year to date a result of just seven companies. You probably already guessed they are Apple, Microsoft, Amazon, Google, Tesla, Meta and Nividia. If you were to remove these companies from their indexes, performance as of 6/15/2023 would be around 1%. You can also see this being played out by comparing cap weighted indexes to equal weight indexes with cap weighted S&P 500 being up about 17% where the equal weight is up 7%. There is a huge reliance on the big seven companies and that is not necessarily a sign of healthy markets when we see such divergence. Another interesting point is if you were only invested in emerging markets, small caps, and mid-caps you likely had nearly neutral returns through 6/15/23 because you were missing the top seven companies in your portfolio. The main question is what happens when these areas begin to cool off, especially when they are extremely overheated, at least in the short term?

As we are in the traditionally weaker season of the year, you may be wondering what is “actionable. Probably for now, not much. Markets can be unpredictable for extended periods of time. If you have exposure to the top seven companies either directly through stocks or through index and mutual funds you should just be aware of the extension that exists. We know it’s nearly impossible to truly time the market. However, we can learn from market trends and allow our movements to be guided from that knowledge. This could be a good time for investors to review their portfolio and see if they are properly diversified in the right areas. We use relative strength to show us the best potential areas of the markets for performance. In the first half of the year technology, materials, industrials, large cap growth and large cap blend were all areas of strength. We will have to see if these trends hold through the end of the year and be prepared to reallocate if things begin to shift. Investors should also make sure their investment strategy is aligned with their overall risk tolerance. Taking on more risk than you are comfortable with because you are feeling “fear of missing out” is likely to eventually come back to bite later. As always, if you have questions about what we discussed or about your current investment strategy please give us a call. We are always happy to help. Enjoy the start to your summer and we will see you in August.

ASHLEY ROSSER, PRESIDENT

Prior to her career in the financial services industry, Ashley earned her Bachelor of Science in Nursing from Cedarville University.

Ashley decided to make a career change from her ten years within the healthcare industry as a pediatric emergency room nurse to retirement and 401K investment planning. She joined Victory Fiduciary Consulting in 2008 after obtaining her Series 65 professional financial license and went on to earn her AIF (Accredited Investment Fiduciary) professional designation from the Center for Fiduciary Studies.