As always, I want to thank you all for being such great clients and friends. Let me also thank you for allowing me to help you pursue your financial security by managing your hard-earned money. Many of you have trusted me with new investments this year and many have helped me and their friends and loved ones by providing referrals. For that vote of confidence, a special thank you.
I’d like to share a short story.
Clients that I have worked with for a long time and considered friends left me this past year. The clients took all their assets without talking to me or discussing their concerns. Once I was finally able to speak with them, they shared that the reason they left was that the other advisor they met said I charged them fees nearly 10 times what they were actually being charged. The clients didn’t call me to ask if that was right nor to discuss it. It was quite a shock that after being in their home fifteen to twenty times and sharing dinners with them, they believed this new person without talking to me.
Their son, who is still a client, called me a week after and asked me to keep him as a client and told me that he told his parents how wrong they were. Unfortunately, I cannot respond to concerns or answer questions if I am not contacted. I wish I was a mind reader, like The Great Kreskin and was able to save this relationship. Sadly, I am lacking that skill.
Please call me any time to discuss anything that’s on your mind. In addition, changing to a new advisor is often not the answer. It is very easy for someone to look at a statement and come up with a reason that they could have done better. Instead investing - not just in products, but in a long-term relationship and honest discussion most often will yield more successful results.
Now, for a look at the markets.
2023 started with equities reversing what happened in 2022 and all the most sold off stocks and sectors rebounded and the winners from 2022 sold off. There are a lot of technical reasons - such as tax loss selling and buying back sector rotations - that this occurred. The real reason is that economists were seeing inflation slow down and felt a recession was imminent which would cause the Fed to lower rates and switch from Quantitative Tightening to Quantitative Easing. If interest rates were to come down as expected, it would most likely be a boon for tech stocks and other riskier assets.
Then, February came, and inflation proved to be stubbornly high and the economy resilient. The “hard landing or recession” talk became “soft landing or slower growth economy” talk. That led interest rates to go back higher. As a result, stocks sold off but the technical or riskier stocks held up the best.
The Fed has a goal of pushing down inflation no matter the cost and now has a battle on their hands. The labor market is tight and job growth strong. That means more money to spend and therefore inflation will not come down quickly. Then there came a small bank crisis last week that tightened financial markets helping the FED do its job. This event led to lower rates which historically benefits stocks. The market has repriced how high the FED can raise rates. It now seems two plus months into the year that technology is back in favor as the market is confident that one way or another rates will come down and growth is slowing down.
So, what am I doing?
- Since March of 2022, I have been removing many single stocks and replacing them with Exchange Traded Funds (ETF’s) and other funds to further diversify investments.
- In addition, using various types of ETF’s and funds to create well balanced models. What worked last year isn’t working this year, so those changes have been implemented.
- I’m also adding newer strategies and I feel confident that I have my clients well positioned given current market conditions.
lf you are interested in speaking more about any of this, or have any other questions or concerns, please feel free to email me to schedule time to talk. In the meantime, I keep working on my mindreading skills.
Thank you very much.
Jordan Kerner
Past performance is no guarantee of future results. Investing involves risk and the potential to lose principal.
The information provided, including references to market sectors are for general informational and educational purposes only. No comments referenced herein should be construed as a recommendation of any kind or investment advice.
Forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time and cannot be guaranteed. Actual results could differ materially from those anticipated. Please consult your financial advisor before making financial decisions.
ETFs trade like stocks, are subject to investment risk, fluctuate in market value, and may trade at prices above or below the ETF's net asset value (NAV). Upon redemption, the value of fund shares may be worth more or less than their original cost. ETFs carry additional risks such as not being diversified, possible trading halts, and index tracking errors.