Special Note: Just a reminder that we offer tax preparation through our tax team at Summit Tax Services/Heemer Klein. If you’d be interested in a quote, as we’re very competitive, please give us a call at 586-459-5340. Our goal is to make tax time easier on you. Please do not finalize/file your taxes before March 15th if you have a non-retirement investment account with us in case a 1099 is revised for any reason.
Navigating the Market Amidst Conflicting Data
In January, we received the latest inflation report, which showed that Core inflation, which is of particular interest to the Federal Reserve, increased by 0.3% in December and 5.7% over the past year. Services inflation came in year over year at 6.1%, which is still high, but lower than the 8.5% three months ago.
Researchers at Goldman Sachs recently published a note titled: “Getting worse before getting better” when describing the housing market. They downgraded their prediction, saying that housing prices will fall 6.1% nationally in 2023. Last week we received some troubling house data: Sales of existing single-family homes have decreased 26.6% since December 2021.
Our Approach for the Future
Santa Claus did not arrive in December, as the S&P 500 was negative 6.3%. The Nasdaq was down 8.73%, while our daily actively managed portfolios were actually positive. We encourage you to look at your year-end statements to see the overall performance and call us if you’d like to discuss it.
In January, the stock market indexes were positive, but most of our portfolios were negative. When looking at the overall picture, we believe the stock market is overbought in the short term and is overdue for a drop, so we positioned to profit from a drop the same way we did in December. That predicted drop has not occurred yet. We have a research indicator that predicts recessions. While past performance cannot predict future performance, the indicator flashed that a recession is coming, and in the past, it has a 100% hit rate.
A Look at Our Investment Toolbox
As you know, we have many tools in our toolbox, including the ability to purchase investments that profit when the stock market goes down and flip back to normal stock-based investments if we think the market is heading up. After a short-term drop occurs, we will consider removing our hedges, buying stocks/stock ETF’s, and aligning with the market again.
Our ultimate goal is to make money, so we’re using what we believe to be all the appropriate tools in our toolbox to accomplish that goal potentially. We are always trying to improve, so we’ve made some changes to our research company lineup and plan to continue to improve our processes to help ensure potentially better performance this year moving forward. We aim to profit from the environment and watch inflation, the Ukraine war, the Federal Reserve, corporate earnings, and the markets like a hawk. This is why we manage our active portfolios daily.
Financial Review for 2023: Schedule a Meeting Today
We’d love to have a review meeting with you to discuss investments, retirement income planning, college planning for kids or grandkids, tax preparation, health insurance, including Medicare supplemental and prescription drug plans, and various other financial planning topics. Please contact our office at (586) 226-2100 to schedule a meeting today!
Keep Us Informed of Financial Changes
If you’ve had any changes to your income, job status, marital status, retirement income planning, 401K options, address, or any other financial changes, please get in touch with us right away. We hope you and your family have an excellent, safe, and healthy start to 2023!
Happy New Year again to you and your family!
Sincerely,
with contributions from Robert Wink, James Wink, Zachary Bachner, and James Baldwin
Notes & Disclaimer: Stock market indices, like the S&P 500 Index, are unmanaged groups of securities considered to be representative of the stock market in general or subsets of the market, and their performance is not reflective of the performance of any specific investment. Investments cannot be made directly into an index. Historical returns data are calculated using data provided by sources deemed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy, completeness, or correctness. This information is provided “AS IS” without any warranty of any kind. All historical returns data should be considered hypothetical. Past performance is no guarantee of future results.
This communication is only intended for recipients who reside in states where our agents are licensed to sell these products. Investment advisory services are offered through Summit Financial Consulting, LLC, an SEC registered investment advisor. Registration does not imply a certain level of skill or training. Summit Financial Consulting Investment Advisor Representatives do not render tax, legal, or accounting advice. Insurance products and services are offered through Summit Financial Consulting, LLC. Note: Please update Summit Financial Consulting, LLC, if your investment objectives have changed or if the personal or financial information previously provided has changed. The investment advisory disclosure document that describes Summit Financial Consulting investment advisory services account is provided to you annually. Please consult Summit Financial Consulting for a copy of this document should you need an additional copy. All guarantees are subject to the claims paying ability of the issuing insurance company. Past performance cannot predict future performance. It is not possible to invest directly in an index. The Sherman Group, LLC is not associated with Summit Financial Consulting, LLC in any way, other than a research sharing partnership. Back testing is more heavily scrutinized than any other type of investment analysis because it can be updated to take advantage of past data. The algorithms and trading signals that we receive from the Sherman Group, LLC were created using back testing with the goal of creating a sustainable research process. We have reviewed data from the entire 20 year period which was mostly back tested, and have also personally reviewed the live data for the past 5 years and feel comfortable with it, but we encourage you to meet with us and ask questions so you are fully informed on what we plan to do with your investment assets at TD Ameritrade. It is important to look at fees, taxable repercussions, and trading frequency when looking at a rate of return number. There is no perfect system or research feed, and Sherman Group, LLC has had both longer term and short-term periods where they lost money. Investing involves risk, and these portfolios are no exception.