Third Quarter 2023 Commentary

After a strong start to the year, many were wondering if the economy could smoothly transition from a period of growth to a slower sustainable state without facing a recession or other economic issues. This is what we hope for, but recent economic data suggests there may still be challenges ahead.

The Federal Reserve is primarily focused on fighting inflation without causing job losses or harming GDP growth. However, they are likely nearing the end of their interest rate increases, with the possibility of just one more hike this year.

Companies have been investing more in manufacturing, which is positive, but their profits are slowing down, which could limit their ability to expand. Trade might also slow the economy down a bit due to the strong dollar and global economic slowdown.

Consumers have seen improvements in employment and wages, but some have been using their savings and taking on more debt to keep up with rising prices. The recent increase in interest rates has made it harder for some to manage their debts. Additionally, factors like rising energy costs, the return of student loan payments, and labor strikes may reduce spending in the months ahead.

Overall, the U.S. economy is expected to keep growing, but at a slower pace. While it's uncertain if a recession will happen soon, a slower economy could be more vulnerable to unexpected challenges. It's important to remember that many factors influence the stock market. A diversified portfolio with quality investments, liquidity, and higher yield can provide some protection.

If you haven't reviewed your financial situation recently, we encourage you to schedule your Annual Check-in meeting. While market volatility is beyond our control, we want to help you manage important aspects like asset allocation, risk tolerance, and other factors that are within your control. By managing these aspects effectively, you can make informed decisions about your investments and financial goals. Please let us know if there have been recent changes in your financial situation.

Warm wishes to you and your family for the upcoming holiday season!