Investment Committee Meeting Recap Q1


Andrew Ulvestad, AAMS®
Wealth Advisor

After a weak February, markets rallied in March. U.S. markets were up by low single digits, while bond markets were in the same range. International markets also showed modest gains, with developed markets about the same as the U.S. and emerging markets doing slightly better. This was a stronger start to 2023 than most had
expected, and it may signal how the rest of the year will play out.

The US economy remained resilient, driven by consumer spending. While consumers are shifting spending from goods to services, overall spending continues at a healthy clip. But three factors—dwindling excess savings, higher interest rates and softening job creation— should curb growth soon.

In the short term, the economy may  xperience slower growth, and markets could struggle given increased risks to earnings growth. The second quarter may be tougher for markets than the start of the year. At the same time, as we look further forward, a strong first quarter has historically been a positive sign for the year as a whole.

We can reasonably expect more volatility in the short term, but the longer-term picture remains. The progress on inflation drove the gains during the first quarter. While it is still too high, it is well below where it started the year. With the Fed having hiked rates at a fast pace, markets are now convinced that inflation will come under control, as the benchmark yield on the 10-year U.S. Treasury dropped significantly in March.

Equity markets want the Fed and inflation to get off of their cloud. Why? Because equities tend to rally when the Fed ends its tightening cycle, inflation decelerates, and interest rates fall. Assuming the Fed doesn’t overtighten and take the economy into a severe recession, S&P 500 earnings should remain solid.

If anything, the economy’s better-than-expected start this year gives us more confidence in the upside potential. A weaker dollar, quickly improving supply chains, and easing commodity and labor costs should help support margins. The current decline in equities has likely already priced in a mild recession. When we finally get to the recession, sentiment should turn more positive— as markets anticipate coming out of it.


Duration measures a bond’s price sensitivity to interest rate changes.

During our Investment Committee Meeting in April, we discussed these economic and market themes and analyzed our strategies in detail. Based on our outlook and anticipation that rate hikes will slow or stop, we believe it may be prudent to keep fixed income duration low. While we have a more favorable outlook on value currently, we anticipate that to shift to a more neutral outlook of growth and value as we try to best position ourselves for both the short and long term.

As always, thank you for your continued trust. Market corrections – even recessions – are part of normal  market cycles, but it’s perfectly natural to be unnerved. Stay focused on your personal goals, don’t get overwhelmed by media hype, and remember we’re here to help. Contact us if you have any questions or would  like to review your plan.

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This content is for general information only and is not intended to provide specific advice, an endorsement, or  recommendations for any individual. Past performance is no guarantee of future results. Investing involves risk,  including possible loss of principal. No strategy assures success or protects against loss. To determine what is appropriate for you, consult a qualified professional.


5 Lessons I Learned from Previous Bear Markets

2023 will mark 30 years in this business, so I have been through my share of market downturns.  And like you, I don’t enjoy them either!  With my experience I have learned a lot of valuable lessons.



1. Downturns are only temporary:  

If history has shown me anything, it’s that even the worst bear markets don’t last forever.  No one knows for certain how long with downturn will last or how far stock prices might drop. 



Previous bear markets weren’t easy, either. During the Great Recession, the S&P 500 fell around 57%. When the dot-com bubble burst, it dropped close to 50%. During the coronavirus crash, the market plummeted by around 33% in a matter of weeks.



Despite everything, though, the market eventually bounced back. No matter how severe this downturn becomes, things will get better.



2. I’ve seen this before: 

There are thoughtful, experienced economists and professional investors who can give you well-reasoned arguments why this bear market is different, why the economic problems are different and why this time things may get worse. But while some others might tell you, “This time is different,” my message to you is, “I’ve seen this before.”  I don’t know if the current decline will fit into the bear markets past. But what I do know is that every bear period has eventually ended, and the market started back up again.



3. A better tomorrow: 

Over time, and in time, the financial markets have demonstrated a remarkable ability to anticipate a better tomorrow even when today’s news feels awful. While no one can predict the future, and no two market declines are the same, we have been here before. We’ve learned how to survive and prosper when markets begin to recover.



4. Perfect timing is impossible: 

The fact that no one knows when a bear market will end is one reason it’s a mistake to put off investing or pull money out of the market. Compounding the problem, stocks tend to surge at the start of a new bull market. So, by the time it’s obvious that the bear market is over, a big chunk of the gains is already in the books.  



5. Market disturbances are a fact of life for investors:





Sources: MSCI, RIMES. As of 6/30/22. Data is indexed to 100 on 1/1/87, based on the MSCI World Index from 1/1/87–12/31/87, the MSCI ACWI with gross returns from 1/1/88–12/31/00, and the MSCI ACWI with net returns thereafter. Shown on a logarithmic scale. Returns are in USD.



As long as I’ve been in this business, I’ve seen the market swing from excessive enthusiasm to extreme pessimism. Warren Buffett said it best: “Be fearful when others are greedy and greedy when others are fearful.” Put another way, bear markets are an investor’s friend, provided they remain calm, patient and focus on the long term.