Market Outlook and Commentary, Review of First Quarter

Your Lifetime Wealth Strategies Team |

Economy

2024 has started off with the same enthusiasm for stocks as we ended 2023 with.  The continued record highs achieved by the equity markets can be attributed to several fundamental factors such as;

  • Continued strong earnings from Fortune 500 companies

  • Optimism from investors related to the business investment

  • Spending on Artificial Intelligence related technology

  • Lower rates of inflation, and

  • A continued belief that the Federal Reserve has completed its efforts to cool off the economy by raising rates. 

While the markets tend to price in expectations for the next six months, we feel confident that the upward trend in the economy is in tact and the US will continue to grow this year with lower rates and less inflation as a tail wind for strong company earnings.

We do expect volatility to pickup, since we feel the market has come far very rapidly.

 

Equity Market Positioning

We continue to maintain our U.S. Large-Cap focused portfolio positioning to take advantage of the strong corporate earnings environment and continued economic growth.

Our portfolios are overweighted in US stocks relative to International as we feel the economic picture is clearer domestically, and we tend to feel that a balance of growth and value style companies is the best approach to diversification in these markets. 

We remain cautiously optimistic that conditions will continue to support our thesis, but are willing to make changes if uncertainty about inflation or the presidential election persist and prove to disrupt the current rally.

 

Fixed Income Positioning

The trend of higher short term rates continues to support our use of Treasuries, CDs, and Money Markets as safe liquid investments for our client's conservative funds. 

That being said, because the Federal Reserve has now made it clear they are more likely to pause or even start lowering rates; we have been moving some of our short term fixed income allocation into longer dated traditional bond fund portfolios.

We feel the mix of both short term fixed rates and longer dated bonds should provide a stable return over the next several years and we shouldn’t see the extreme losses from bonds going forward as the economy cools and rates move lower.