In the past four years, the S&P 500 has experienced two bear markets resulting in declines of more than -33% in 2020 and -24% in 2022. Despite these declines, the S&P 500 has gained more than 58% over this period. Focusing on the bigger picture and tuning out the short-term noise is helpful in maintaining your long-term strategy.

In 2023, Elser Financial clients gifted more than $8.6 million tax efficiently to charities through donor-advised funds and qualified charitable donations. Thank you for giving back to your communities!

The Federal Reserve held interest rates steady in September, but kept open the option of another rate hike in the near term. They forecasted that rates may stay above 5% through 2024 due to a resilient labor market.

The growth in the market in the first 5 months was largely due to a small group of stocks, demonstrating the difficulty in selecting the “winners” (see reverse side graph). Although economic indicators have been signaling a slowing U.S. economy, breadth expanded in June and the markets performed well.

It is worth noting that the failure of Silicon Valley Bank and Signature Bank were not systematic banking industry problems, but rather a result of 90% of the deposits at these banks exceeding FDIC insurance limits, and a high industry concentration to cash-demanding venture capital and crypto firms.

Historically, both the economy and the stock market experience natural, yet unpredictable, economic cycles, expanding for 8 out of 10 years and contracting for 2 out of 10. When wages and prices soar, the Fed raises interest rates to slow these down. As the Fed slows the pace of their rate hikes, we will look to lengthen the duration of our bond portfolios to lock in higher yields for longer periods of time.