The end of 2023 saw a strong rally in both the stock and bond markets, capping off a surprisingly positive year. The broad US market rallied 12.1% in the quarter, capping off a 26% return for all of 2023. Meanwhile, the US Aggregate Bond Index rose 5.4% for the quarter and 8.3% for the year. All these positive returns came on the heels of a dismal 2022 and came amid inflation concerns and most early 2023 forecasts predicting a gloomy outlook.
The rally was driven by data that makes it appear the Federal Reserve has pulled off the “soft landing” scenario that was thought to be very difficult: throughout 2023 inflation came down significantly without unemployment spiking and the economy tanking. It is important to remember that inflation is still above the Fed’s long–term target, and though they have paused their rate increases they are watching the data to see if more will be necessary.
As last year showed, predicting the path of the economy and the markets is nearly impossible to get right, and we do not try to forecast. Every quarter, our portfolio advisors at East Bay Investment Solutions provide us with what they consider the good signals and the possible problem spots in the economy, along with in-depth commentary on how things went last quarter. You can download their full report HERE or you can watch their recorded video presentation for the full story.
About Shotwell Rutter Baer
Shotwell Rutter Baer is proud to be an independent, fee-only registered investment advisory firm. This means that we are only compensated by our clients for our knowledge and guidance — not from commissions by selling financial products. Our only motivation is to help you achieve financial freedom and peace of mind. By structuring our business this way we believe that many of the conflicts of interest that plague the financial services industry are eliminated. We work for our clients, period.
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