We wanted to update you on recent developments that have taken place within the past month that impact your investments. Our quarterly letter stated that the inflation data that we have been reviewing is significantly better than what has been reported in the popular media outlets. Our readings were confirmed by positive inflation data that was released in the past few weeks. Our concern was that Federal Reserve Chairman Jerome Powell has been focusing on the employment data which is quite good. Yesterday, the Chairman started “walking back” on his past remarks. His press conference and the recent inflation data is why the financial markets are so positive year to date.
The good news with his remarks is that they do support this market rally. It also moves up a downside correction to only 5%-10% in the short-term barring non-economic events. The new point where we would look to rebalance portfolios would be at the 3,800 level or so on the S&P 500*. We did encourage entering the market at the end of the third quarter when the S&P 500 was even lower than that as you know.
The market is now very “data dependent” and will move on different inflation data. Markets will go down if inflation data is bad and vice-versa. We continue to remain cautious as markets normally do not rally in the face of a slowing economy and rate hike pauses or even cuts. We are comfortable with where our portfolios are and will proactively contact you when we think a move needs to be made.
Clients at or near retirement are STRONGLY encouraged to review the estimated interest/dividends on your AVANTAX brokerage accounts which is towards the back of the statement. Client statements for the period ending January 31, 2023 were posted yesterday for clients using the portal. If you have any questions or comments, please let us know. Clients that would like to have an update meeting should contact the office as well.
Thank you again for your business!
Jack Oujo, CPA/PFS, CFP®, CSA, MS (Taxation)
Oujo Wealth Strategies
1540 Highway 138, Suite 106, Wall, NJ 07719
908-675-5571 – Cell