🎙️"Inflation is proving to be sticky, and the economy is NOT slowing down. It's starting to become clear that interest rates will remain higher for longer...."
🎯 Get the rundown from Michael Baum, CFP®, RICP®, on the current state of the financial markets and how that may impact your finances.
Welcome to the Monthly Market Update on You and Your Money. Empowering you to reach your goals with tips and insights to help you Plan Well, Invest Well and Live Well. This month's market update comes from Michael Baum, vice president and associate financial adviser Weiss, Hale and Zahansky Strategic Wealth Advisors. Now on to today's topic. The latest news from the financial markets. What do you got, Michael? Well, it's been a really interesting year in the markets. As happy as we were with the strong first half of 2023, which saw impressive growth, especially in the technology sector. Our investment committee was not convinced we were out of the woods with volatility, as the Fed has continually signaled that rates would have to remain higher for longer to get inflation down to their 2% target as more economic data comes in. Inflation is proving to be sticky and the economy is not slowing down as quickly as the Fed had hoped. So it's starting to become clear that interest rates will in fact remain higher for longer, which creates a real headwind to equity growth. Investors seem to be coming to terms with this reality that rates will be coming down sometime in 2024. And what we're seeing in the markets now is something of a flight to safety as many investors are drawn to the security of these higher yielding, low risk investments like money market CDs and Treasuries. So we've made some investment, some adjustments to the portfolio as we manage to take advantage of the current interest rate environment. But for the most part, we're still advising our clients to maintain a long term outlook. Stick with the strategy that aligns to their individual goals and remain well diversified. Do you anticipate another rate hike by the Fed any time soon? It seems like the posturing of the Fed is that there's some split or some divide among their rank. Some some may think it's necessary. Others are pushing against that. It seems like I would put it at about a 50/50 shot right now that that the next the next meeting calls for a very small rate hike. Which sector of the market in the last let's say it's October in the last ten months has been doing the best and which one is bringing up the rear? Well you know the three major indexes would be the Dow Jones Industrial Average, the S&P 500 and the NASDAQ and the Nasdaq is the one that's dominated by tech companies. And it's really led the charge, specifically the alternative, the high, you know, artificial intelligence sector has really pushed earnings this year and growth this year. So that was a really incredible run in the first half of the year. And it's sort of petering out Now, if you look down that spectrum, the Dow Jones Industrial Average has been lagging. So, you know, it's the big industrial and more value based companies that have performed the worst so far. This year. Michael, do you have clients who have part of their portfolio and investment in AI stocks? Well, I mean, we the way we invest our portfolios, we certainly invest broadly in a diversified way. So we're certainly getting exposure to those companies with the way that we're positioning money and the way that we're investing. We don't often on any of those individual stocks outright, but. If I wanted to invest in I, I've never thought of this before. I never asked this question before, but who's out there who would be an example of someone that an investor would put money into? And I investment? Well, I think, you know, the all of the biggest tech companies that you would think of are investing in A.I. and buying up smaller A.I. companies. So your Googles META or formerly Facebook, you know, all of those companies are making huge investments in artificial intelligence. And so you don't necessarily need to find, you know, the next startup company to get good exposure to artificial intelligence. In fact, I would probably say it's better to go with an established company who has, you know, the resources to just continue buying up the technology as it comes out and putting it to the best use. Really interesting stuff. That's it for today. Thanks for listening to you and your money. Find even more episodes, videos and other resources at our website. whzwealthcom. Be sure to come back next week for more tips to help you live fearlessly and pursue your financial and life goals. Until then, live well. Weiss, Hale and Zahansky Strategic Wealth Advisors offer securities and advisory services through Commonwealth Financial Network member FINRA/SIPC, a registered investment advisor. Fixed insurance products and services offered through CES Insurance Agency. They practice at 697 Pomfret St, Pomfret Center, Connecticut, 06259 and can be reached at 860-928-2341. Weiss, Hale and Zahansky Strategic Wealth Advisors do not provide legal or tax advice. The tenured financial services team strive to support clients in achieving their financial life goals. For more information regarding wealth management and customize financial planning with Weiss, Hale and Zahansky Strategic Wealth Advisors, please visit. www.whzwealth.com.