The Advisor, July 2024

Happy 4th of July!

As we approach the 4th of July, we are reminded of the remarkable journey our nation has taken and the enduring spirit of freedom that binds us together. Independence Day is not just a celebration of our nation’s birth, but also a time to reflect on the values of liberty, courage, and unity that have shaped the United States.

Whether you’re planning a festive barbecue, a day at the beach, or a night under the stars watching fireworks, we hope this holiday brings you joy, relaxation, and a renewed sense of patriotism. Let’s honor the sacrifices made by those who fought for our freedom and continue to strive towards a brighter future for all.

Wishing you and your loved ones a safe and happy 4th of July!


Your Market Update

Summer if Off to a Strong Start

As we end the month of June, equity markets remained positive year-to-date and continued their upward movement from May. The S&P 500 was up 5.0% month-to-date as of June 27th, and the tech-heavy Nasdaq was up 6.2%. Meanwhile, the slower-growing companies of the Dow Jones were up 2.6% over the same period. The market increase was driven by the tail-end of solid earnings and continued steady macroeconomic conditions (with some spots of moderation). Aggregate earnings are expected to be up 11% for calendar year 2024, and the substantial 8% increase in the first quarter got us off to a strong start.

The Fed press conference on June 12th also helped steady the market, even though the outlook was a bit more hawkish than the April 30th meeting. Rate cuts remain unknown. However, equity markets have acclimated well to the “higher-for-longer” environment, and investors remain focused on companies and earnings. There has been an increase in business press articles referencing the big move in some tech stocks and mentioning the high value in the stock market, currently 20.4X forward earnings. Multiple articles in the Wall Street Journal have compared today’s Nvidia (NDVA) to the late 1990s Cisco Systems (CSCO). We are aware of these articles and the valuations of some growth stocks, but they have not prompted us to change our positive view of equities. Broadly speaking, the market remains strong, and aggregate earnings are impressive.


In addition to the Fed press conference, June 12th marked the release of May’s CPI report by the Bureau of Labor Statistics. Headline CPI rose 3.3% year-over-year (3.4% excluding food and energy), which is slightly improved over the prior month and not as bad as feared. The prospect of a “higher-for-longer” rate environment was again offset by a reasonable CPI report and continues to foster a challenging fixed income environment. Month-to-date as of June 27th, the Bloomberg U.S. Aggregate Bond Index (AGG) was up 1.7%; year-to-date the AGG was down 0.4%.

At the aggregate level, volatility remained low in May, and broad market volatility still comes in on the low end of the historical range. We anticipate volatility will pick up as the year progresses though.

Looking Ahead

We remain invested in a broad mix of investment securities anchored by the S&P 500 in our equity holdings, with a smaller portion allocated to select growth investments. In addition, our equities are augmented with structured growth notes and attractively yielding dividend stocks that have a high confidence of dividend payouts.

We are also currently invested in both the highly vetted private equity manager, Carlyle, and our in-house Venture Growth Fund to add more alternatives to our equity allocation. As mentioned in prior reports, the environment and valuations for pre-IPOs have improved notably throughout the year.

For fixed-income investors, we continue to take advantage of historically high short-term rates (while we can), augmented with yield notes. The yield notes allow us to take advantage of moments of volatility to help drive a higher yield while our private credit allocation to Apollo allows us to take advantage of the “higher-for-longer” interest rate scenario. An allocation to mid-duration fixed income, corporate bonds, and municipal bonds rounds out our fixed income portfolio.

To Sum Up

Our outlook for 2024 is still favorable – we expect that the economy will continue to grow slowly and steadily, with pockets of weakness resulting from the Fed’s engineered effort to fight inflation. We do anticipate that short-term volatility may pick up, and this is something equity investors should be aware of. We are also closely monitoring other factors including the budget deficit, the price of energy, and the upcoming presidential election. These issues are not yet notably affecting markets, but they may become more pronounced as we enter the second half of 2024. Generally, a buy-and-hold view, if properly positioned, should help drive a solid return and manage risks.

Sources: JP Morgan Asset Management, Bureau of Economic Analysis, Bureau of Labor Statistics, Morningstar, Factset, and Ycharts


Why Do We Worry About Money?

Even the wealthy worry about money. Financial success doesn’t eliminate fears or insecurities, often rooted in childhood experiences, societal pressures, or the responsibilities of managing wealth. Here are three main reasons we worry about money:

  1. Fear of the Unknown: Concerns about market volatility, economic downturns, and unexpected life events cause stress. A comprehensive financial plan with contingency strategies helps reduce anxiety and provides a sense of control.
  2. Responsibility to Others: The obligation to provide for family, support charitable causes, and contribute to communities can be overwhelming. A legacy plan that aligns with your values can ensure your wealth is managed wisely and ethically.
  3. Maintaining Financial Independence: Even the wealthy fear running out of money or becoming a burden. Planning for healthcare and considering long-term care insurance can provide peace of mind.

Understanding these concerns, we offer personalized strategies to help you navigate financial worries with confidence. Having a trusted advisor by your side makes achieving financial peace of mind possible.