These may not be the best of times, but they are still pretty good…
A financial pundit shared these thoughts on a recent conference call, and it obviously makes us think of the opening line of Dickens A Tale of Two Cities. Are these the best of times, or the worst of times?
We are halfway through 2023 and the economy, as well as the stock and bond markets, have had to contend with a lot of risk and uncertainty.
To name a few:
- Continuing war in Ukraine
- Federal Reserve raising interest rates 10 consecutive times over the past 15 months (pausing for the first time in June), the largest increase in rates since the early 1980s
- Three bank failures, including Silicon Valley Bank in March
- Inflation is at around 4% as of June 30 – falling, but still running above the Fed’s 2% target
- A U.S. Government Debt default that was averted (as usual) ahead of the deadline
Maybe that is why consumer confidence remains near historic lows, and below the levels during the pandemic in March 2020 (see charts below). Or maybe the constant media attention on all daily things in the economy and financial markets makes all of us a little anxious? As we know, negative news really does get the most mouse clicks.
Despite these uncertain times, markets have shown plenty of signs for optimism through June 30, 2023:
- The S&P 500 Index (largest 500 stocks in the U.S.) is up 16%
- International stocks are up 12%
- U.S. Bonds are up over 2%
- Cash is earning well over 4%! (Side note: if you are not earning 4%+ on your cash savings, please contact your Charter Oak Advisor for options).
The market is now 20% higher than stock market lows hit in October 2022. Thus, we are here to remind our readers that there is always news (noise) in the marketplace. However, long-term successful investing is about the discipline of having a long-term perspective, focusing on what we can control, and staying diversified.
Bear markets never feel good and may shake our confidence, but bull markets prevail, and the ingenuity and wealth creation of corporations continues to help us reach our financial goals.
The Advisors at Charter Oak are always diligently monitoring the economy and the market. But we remain more focused on our clients – and their long-term financial success and well-being. Think of us as your financial coach helping you stick to the plan we created while blocking out the noise, and champions of helping you live the life you imagine.
As always, we are here for you in these pretty good but not great times, as we will be in all times. It is a pleasure and a privilege to serve you. Please go enjoy your summer!