Welcome to our May 2023 Market Update Video!
Before I begin, please let me offer a HUGE welcome to the newest member of our team: Lori Tipple. She will be sitting here in Tacoma and comes with a wide array of experience. Welcome Lori!
When I say words like “inflation”, “higher interest rates”, “recession” are you reminded of recent popular terms we’re hearing in the news?
We saw the stock market rise about 1.5% in April.1 That sounds a lot better than what we’re hearing out of the media. Want some simple advice? Turn off the media and the worriers!
Moving right along to a more serious note, the Federal Reserve looks closer to the end of hiking rates. As of this commentary, they were expected to raise rates ¼-point at the May meeting.2 I believe that their cycle of hiking rates has played largely into why we have seen increased market volatility over the past 18 months.
Interestingly, a 2-year U.S. Treasury yield was just over 4% at the end of April.3 In my opinion, this gives investors solid income and a place that may shield from volatility.
As we look ahead, I believe only time will tell if the banking challenges we saw in March reappear. But for a minute, let’s pretend they do…how would that affect us? I believe rates would drop which may help us make even more money on bonds. Second, stocks may react by dropping at the onset and then lower rates typically help stocks. Lastly, if banking really deteriorates we have been advocating for precious metals which may do very well in the worst-case scenario.
So in a nutshell, I feel we may be quite well protected for what we’re seeing. Now let’s take note of the fact that our nasty northwest weather may have finally turned and enjoy some more sunny days.
Thank you for your support and please share any questions or feedback. See you next month!
Tim Truebenbach, CFP®
Senior Vice President – Financial Advisor
Disclaimers and Sources
1 Source: Thomson ONE Reuters, S&P 500, 5/1/2023
2 Source: Forbes, What to expect from the Fed’s May meeting, 4/12/2023
3 Source: JP Morgan Weekly Market Recap, 5/1/2023
The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
The NASDAQ Composite Index measures all NASDAQ domestic and non-U.S. based common stocks listed on The NASDAQ Stock Market. Bonds are subject to credit, market, and interest rate risk if sold prior to maturity.
Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors.
Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.
Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.