Finally! A small rally at the end of November provides a sign of life that investors have been searching for. While we aren’t out of the woods yet, the Federal Reserve has shown signs that rates hikes are over and we can look forward to normalized interest rates as we enter 2023.
The consumer sector has also provided good news, as 30-year fixed mortgage rates dropped from a high of 7.12% in October to 6.62% today. Holiday sales data suggests an increase in discretionary spending as a record 196.7 million Americans shopped during the Black Friday/Cyber Monday weekend, an increase between 6-8% when compared to 2021.
Certain factors, such as momentum, are re-emerging as a key driver of growth in the portfolio. We’ve added exposure to into equities that perform well following recessions and feel that small-cap and value-based companies have the upper hand as interest rates begin to hold steady.
We’re continuing to build a strong core of floating rate bonds and dividend-paying stocks. The higher levels of income help to offset losses in value and performance isn’t as sensitive to interest rates as other major areas.
A slowdown in lending naturally curbs mergers and acquisitions activity in large companies throughout the US. We’re expecting the S&P 500 and the Nasdaq 100 to lag the total stock market in growth over the next 2-3 years while small and mid-cap companies have a chance to grow organically without the threats of a takeover.
Our research points to a recovery after a massive shake up in the market, and a positive December could mark a successful effort by the Federal Reserve to curb inflation. However, if inflation drifts higher then expect more turbulent times ahead. We are thankful to have had the chance to serve you all throughout this year. We’re working diligently throughout the month and we encourage you to reach out to us if you have any questions or would like to discuss anything pertaining to your finances.
Croak Asset Management, LLC is registered as an investment adviser with the SEC. Croak Asset Management, LLC only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.For a detailed discussion of Croak Asset Management, LLC and its investment advisory services and fees, see the firm’s Form ADV on file with the SEC at adviserinfo.gov.
Information contained herein does not involve the rendering of personalized investment advice, but is limited to the dissemination of general information. A professional adviser should be consulted before implementing any of the strategies or options presented. Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment, investment strategy (including the investments and/or investment strategies recommended by the adviser), or product made reference to directly or indirectly, will be profitable or equal to past performance levels.