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QUARTERLY PLAYBOOK - 3rd QUARTER 2023
"Crossing the Bridge"
It seems our belief that markets would cross the bridge into recovery has become the current situation, but the path forward remains obscure. The calls for recession have grown somewhat quieter, yet still seem like the majority opinion. Our analysis continues to see data that supports the case for avoiding recession but acknowledge multiple factors point toward a period of slower growth. The resiliency of consumers and capital markets is a remarkable phenomenon that continues to show strength despite the current interest-rate environment. That said, being prepared for challenges, yet still forging ahead, is the right mindset for the current conditions…
“Discipline is the bridge between goals and accomplishment.” - Jim Rohn
“Perspective is everything”
In the current investment environment, the noise has never been louder. Short -term economic and market projections still have a huge amount of disparity amongst forecasters collectively. Meanwhile, long lasting market volatility (along with a mini-banking crisis) has grated on investor patience. While there are some signs of economic slowing, if you tune out the noise and pessimism, the actual data still isn’t showing signs of recession. In these times, it’s important to maintain a long-term perspective along with a little grit…
“Abnormally good or abnormally bad conditions do not last forever.” - Benjamin Graham, Known as the Father of Investing
“Will someone please tell the markets….”
A recent quote read “the danger in forecasting is that you can be exactly right, but dead wrong at the same time.” Despite the market’s lack of response, the data has been improving- lower inflation, robust GDP, supply chain relief, positive earnings growth, and even the adversaries at the Fed have started to reign in their attack. However, the markets have seemed to plug their ears like a 3-year-old and say “Lalalalalala… I can’t hear you!” We are cautiously optimistic though, that the data will succeed in overcoming the wide-spread pessimistic attitudes as we progress through the year….
“Weathering the Storm”
We have been in the middle of an unavoidable squall, which keeps showing glimpses of calmer waters, but then pulls us back into the eye of the storm. However, it appears that the conditions may be starting to break, and we just need to make our way through it. We will be looking for opportunities, but sometimes the best strategy is to wait for the storm to clear. We certainly don’t want to drop anchor (go to cash and lock in current levels), but we also want to be patient before raising the sails (rebalance into more risk) …