Topic: Wealth Planning

The headlines have been scary recently with escalating tension in the Middle East and higher inflation data causing near-term volatility. Stocks had their worst week of the year and have fallen for three consecutive weeks (for the first time since September).

The S&P 500 gained 27.6% from its low on Oct. 27 through its peak on March 28; this is one of the best five-month rallies in history. Some weakness after that kind of rally is normal. The 5.5% pullback is not so bad in context of a 27.6% rally.

The illustration below is a good reminder that during times of increased market volatility, reality often is different from our preconceived ideas.

This illustration also reflects the last five-plus years. The end of 2018 saw the market fall off a cliff with the market down almost 20% in the fourth quarter alone. The market then had a strong 2019, only to hit a major road bump in 2020 with the pandemic. Then the market quickly climbed out of the hole and continued higher for all of 2021. In 2022, the Fed raised rates to an unprecedented level, and both stocks and bonds sunk to the bottom. In 2023, we saw the markets rise from the bottom and recover the losses incurred during 2022.

We are now experiencing the first mild correction of the year. Who knows if we will have another pullback or an even larger correction? We do believe that market corrections are inevitable, and they are not predictable. If you plan on investing in the stock market over a long period of time, you will experience many dips, corrections and bear markets. 

On average, investors have seen the following since 1928:

• Dips of 5% or more in the market more than three times per year.
• Dips of 10% or more in the market (known as a correction) about once a year.
• Drops of 20% or more (bear markets) once every three or four years and are usually tied to a recession.

Declines in the S&P 500 Index Since 1928

Downturns and market corrections can be difficult to endure, but they also can offer opportunities for investors to purchase stocks at lower prices. Stock prices and valuations swing daily. 

The chart below shows stock returns as well as drawdowns yearly going back to 1980. The blue bar represents the S&P 500 return for the year while the dot shows the percentage decline in the S&P for that same year. Since 1980, stocks have dropped an average of 14% during the calendar year. During the same period, stocks have generally bounced back, rising in 33 of the 43 years. The average return from 1980 to 2023 has been almost 10% per year. 

Annual Returns and Drawdowns of the S&P 500 Index

Most investors spend their time worrying about the short term and spend their lives focusing on the day-to-day. As we often preach, investing is about the long term, which requires patience. Markets do not go up in a straight line. 

Most investors’ mistakes are the result of being impatient, and successes are a triumph of patience — staying invested through pullbacks, corrections and bear markets.

The CD Wealth Formula

We help our clients reach and maintain financial stability by following a specific plan, catered to each client. 

Our focus remains on long-term investing with a strategic allocation while maintaining a tactical approach. Our decisions to make changes are calculated and well thought out, looking at where we see the economy is heading. We are not guessing or market timing. We are anticipating and moving to those areas of strength in the economy — and in the stock market. 

We will continue to focus on the fact that what really matters right now is time in the market, not out of the market. That means staying the course and continuing to invest, even when the markets dip, to take advantage of potential market upturns. We continue to adhere to the tried-and-true disciplines of diversification, periodic rebalancing and looking forward, while not making investment decisions based on where we have been.

It is important to focus on the long-term goal, not on one specific data point or indicator. Long-term fundamentals are what matter. In markets and moments like these, it is essential to stick to the financial plan. Investing is about following a disciplined process over time.

Sources: Carson, Wells Fargo 

This material contains an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources.

Using diversification as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss of principal due to changing market conditions.

Past performance is not a guarantee of future results.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS) an affiliate of Kestra IS. CD Wealth Management and Bluespring Wealth Partners LLC* are affiliates of Kestra IS and Kestra AS.

Investor Disclosures: https://bit.ly/KF-Disclosures

Stocks have picked up right where we left off at the end of 2023. Last week, the S&P 500 officially closed above 5,000 for the first time — and in a little less than three years, the S&P has gained more than 1,000 points.

The chart below looks at where stocks traded one month, three months, six months and one year after each of the major milestones for the S&P 500. On average, stocks are up 8.6% one year after these major milestones.

5,000 Is Here, Now What?

S&P 500 returns after major milestones

Just a year ago, investors were being bombarded with talk of an imminent recession. We now have a healthy economy with inflation well off highs from 2022, a Federal Reserve bank indicating rate cuts are likely to occur in 2024, improving productivity and stocks at all-time highs. 

Stocks have rallied over 22% during the past 4 months. The S&P 500 finished higher 14 of the last 15 weeks – something that hasn’t happened since 1972. A downturn would be perfectly normal following this rally.

The chart below shows that higher prices may remain likely. When stocks have been up more than 5% in the month of February, the market has been higher more than 70% of the time at year end — for an average gain of over 9%.

A Good Start to 2024 Could Mean the Bull Continues

S&P 500 performance when >5% YTD return in February

1. Super Bowl Indicator: First introduced in 1978, this indicator suggests that a win by a team from the NFC meant the stock market would probably go up that year. For more than 30 years, the indicator had an impressive success rate of 95%. In the years when the AFC team has won, the S&P has earned an average return of 8.2%. When the NFC team has won, the average return has been an impressive 9.7%. Both are favorable sets of returns. More recently, the indicator has had a less-convincing track record, including the last two times the Chiefs have won.

2. The January Barometer: As January goes, so goes the year. As we wrote recently, it is true that January has more consistently indicated the direction of the stock market than any other month. Since 1969, when stocks posted a gain in January, the market ended higher 70% of the time. As a reminder, the market finished higher in January this year.

3. First Five Days: This indicator says that the direction of the market during the first five days of January determines whether the market will be up or down for the whole year. Over the past 44 years, full-year gain followed 19 of the 24 times that the market finished higher. However, the market has posted a gain of more than 70% of the time, no matter what the market did the first five days — and a market decline during the first five days has been a predictor only 25% of the time.

4. Consumer Price Index: This week, the Consumer Price Index for January came in hotter than expected, as CPI rose .3% over December. On an annual basis, CPI was up 3.1%, well above the Fed’s target of 2%. Policymakers are watching closely to ensure it continues to trend to the 2% target, and both the stock and bond market react accordingly. As seen on Tuesday, inflation (as reported by CPI) can affect the market in the short term. Time will tell if Tuesday’s selloff was an overreaction to one inflation report or the start of a trend.

5. Yield Curve: The government bond market tends to signal a global recession when short-term bond yields rise above long-term yields. In 2023, the Group of Seven countries (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) all had inverted yield curves. Only one country, the United States, has avoided recession and negative GDP growth for one quarter last year. A return to a more normal yield curve may signal a better outlook for these countries. An inverted yield curve has been a strong recessionary indicator in the past. Every recession has been preceded by an inverted yield curve, but not every inverted yield curve has led to a recession.

6. Equal Weighted Index: Most stock market indexes are capital weighted. Market capitalization is stock price times number of shares outstanding. The larger the market capitalization, the larger the weighting for most indexes, and the bigger the impact on market performance. Equal-weighted index has each stock at the same weighting, providing a measure of what the average stock is doing rather than a handful of the largest ones, known as the Magnificent Seven. In general, the greater the number of stocks pushing the market higher, referred to as market breadth, the more support the market has. The last 14+ months have seen very little breadth to the market gains.

No one indicator or past statistical support provides a guarantee of future performance. Sometimes, people look for causation and not correlation. The popularity of certain indicators for investment decisions is a testament to the desire for an easy answer on how to invest in complex markets.

The CD Wealth Formula

We help our clients reach and maintain financial stability by following a specific plan, catered to each client. 

Our focus remains on long-term investing with a strategic allocation while maintaining a tactical approach. Our decisions to make changes are calculated and well thought out, looking at where we see the economy is heading. We are not guessing or market timing. We are anticipating and moving to those areas of strength in the economy — and in the stock market. 

We will continue to focus on the fact that what really matters right now is time in the market, not out of the market. That means staying the course and continuing to invest, even when the markets dip, to take advantage of potential market upturns. We continue to adhere to the tried-and-true disciplines of diversification, periodic rebalancing and looking forward, while not making investment decisions based on where we have been.

It is important to focus on the long-term goal, not on one specific data point or indicator. Long-term fundamentals are what matter. In markets and moments like these, it is essential to stick to the financial plan. Investing is about following a disciplined process over time.

Sources: Carson, Kestra Investment Management, Schwab

This material contains an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources.

Using diversification as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss of principal due to changing market conditions.

Past performance is not a guarantee of future results.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS) an affiliate of Kestra IS. CD Wealth Management and Bluespring Wealth Partners LLC* are affiliates of Kestra IS and Kestra AS.  Investor Disclosures: https://bit.ly/KF-Disclosures

*Bluespring Wealth Partners, LLC acquires and supports high quality investment adviser and wealth management companies throughout the United States.

Fidelity Investments and Fidelity Institutional® (together “Fidelity”) is an independent company, unaffiliated with Kestra Financial or CD Wealth Management. Fidelity is a service provider to both. There is no form of legal partnership, agency affiliation, or similar relationship between your financial advisor and Fidelity, nor is such a relationship created or implied by the information herein. Fidelity has not been involved with the preparation of the content supplied by CD Wealth Management and does not guarantee, or assume any responsibility for, its content. Fidelity Investments is a registered service mark of FMR LLC. Fidelity Institutional provides clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC.

Stocks continued to move higher throughout January, as the S&P 500 has been positive 12 out of the last 13 weeks. The question is, does a good January mean much for the rest of the year?

It turns out that the “January Barometer” could be a good sign for investors. Historically, when the first month of the year is positive, the rest of the year is higher 86% of the time — up nearly 12% on average. When the first month of the year is lower, the market is higher 60% of the time — up only about 2% on average. Overall, a strong January is potentially a good sign.

So Goes January, Goes the Year

The January Barometer says a strong January for stocks is a good sign

People tend to assume that higher rates are bad for stocks and lower rates are good. What we have seen since the beginning of 2023 is that markets have been strong not because of rates going up or down, but because the economy has been strong.

The assumption was that higher rates would force us into a recession, which would have been bad for corporate earnings, which ultimately is what the market cares about. Instead, we have seen stronger-than-expected earnings in many different companies and sectors, not just technology.

Market analysts continue to expect double-digit earnings growth in 2024. With rates as high as they are today, the assumption is that they will go back down soon. Some economists are aggressively calling for and predicting rate cuts this year.

The risk to the market remains that rates stay higher for longer. The Fed will need to continue to tread cautiously as it battles the possibility of lowering interest rates, but not at the expense of inflation rearing its ugly head again and repeating the mistakes of the 1980s.

Interest Rate Hikes Haven’t Necessarily Been Bad for Stocks

U.S. consumers have weathered the higher interest rate environment quite well. This has a lot to do with the fact that the debt profile of households with significant leverage is comprised of lower-rate, longer-term mortgage balances, compared to higher-rate, shorter-term credit card balances. Household incomes remain strong, especially with inflation easing. This continues to drive consumer consumption.

If you expect inflation to continue to ease, that means real income remains strong. Consumer spending has accelerated as we have seen real income growth from tight labor markets, ongoing spending from excess savings and rising household net worth.

Consumer Financial Obligations and Household Mortgage Debt Service

Each has risen since the 2021 lows, but are still low historically

Now that the market is back to all-time highs, what happens next? The economy continues to roll along. GDP expanded at an annual rate of 3.3%, adjusting for inflation. The economy continues to be underestimated.

It is very difficult to be in a recession with low unemployment, strong GDP, double-digit earnings growth and inflation easing. This does not mean that we don’t expect bumps in the road ahead during 2024. We still have plenty of uncertainty: market domination by a select few stocks, conflict in the Middle East and Ukraine and lofty valuations, not to mention a presidential election in November.

The CD Wealth Formula

We help our clients reach and maintain financial stability by following a specific plan, catered to each client. 

Our focus remains on long-term investing with a strategic allocation while maintaining a tactical approach. Our decisions to make changes are calculated and well thought out, looking at where we see the economy is heading. We are not guessing or market timing. We are anticipating and moving to those areas of strength in the economy — and in the stock market. 

We will continue to focus on the fact that what really matters right now is time in the market, not out of the market. That means staying the course and continuing to invest, even when the markets dip, to take advantage of potential market upturns. We continue to adhere to the tried-and-true disciplines of diversification, periodic rebalancing and looking forward, while not making investment decisions based on where we have been.

It is important to focus on the long-term goal, not on one specific data point or indicator. Long-term fundamentals are what matter. In markets and moments like these, it is essential to stick to the financial plan. Investing is about following a disciplined process over time.

Sources: Capital Group, Carson, FactSet, Fidelity, KIM, Schwab

This material contains an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources.

Using diversification as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss of principal due to changing market conditions.

Past performance is not a guarantee of future results.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS) an affiliate of Kestra IS. CD Wealth Management and Bluespring Wealth Partners LLC* are affiliates of Kestra IS and Kestra AS.  Investor Disclosures: https://bit.ly/KF-Disclosures

*Bluespring Wealth Partners, LLC acquires and supports high quality investment adviser and wealth management companies throughout the United States.

Fidelity Investments and Fidelity Institutional® (together “Fidelity”) is an independent company, unaffiliated with Kestra Financial or CD Wealth Management. Fidelity is a service provider to both. There is no form of legal partnership, agency affiliation, or similar relationship between your financial advisor and Fidelity, nor is such a relationship created or implied by the information herein. Fidelity has not been involved with the preparation of the content supplied by CD Wealth Management and does not guarantee, or assume any responsibility for, its content. Fidelity Investments is a registered service mark of FMR LLC. Fidelity Institutional provides clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC.

It took a little more than two years, but the S&P 500 closed at a new all-time high on Friday. The previous high, set in early January 2022, preceded a sharp drop in the market that was sparked by war in the Ukraine, supply-chain challenges from the pandemic and a spike in inflation not seen since the 1980s.

The bear market ended in October 2022, and since then, stocks have recovered from the 25% drop — despite many economists and Wall Street analysts predicting that a weakening economy, tapped-out consumers and higher rates would keep stocks from moving higher.

S&P 500 Hits Record 4,839.8 Close

Recent milestone closes since January 2020

The S&P 500 has set more than 1,000 new highs since 1957 — meaning a record high was set on 7.1% of all trading days. In our opinion, stocks trading at all-time highs is perfectly normal and should not be viewed as a warning sign.

It is more unusual to go a year without a record high — like we did in 2023 — which has happened just 13 times. After setting a new high, returns were better than average 12 of those 13 times, with an average return of more than 11% in those 12 instances.

Don’t Fear New Highs

S&P 500 performance after a new all-time high and more than a year without making one

The Magnificent Seven stocks – Alphabet, Amazon, Google, Meta, Microsoft, Nvidia and Tesla – have been a big reason for the market rise over the last 12-plus months. At year end, those seven stocks had a market capitalization (value) of about $12 trillion. To get to the S&P’s next $12 trillion in market capitalization, you need to look at 42 companies to find similar value.

The S&P 500 Index has a forward P/E (price to earnings ratio) of less than 16 when you exclude the Magnificent Seven stocks. That is not expensive from a historical perspective. Earnings growth estimates for the Magnificent Seven remain strong, as analysts are expecting more than 20% for those seven stocks and more than 11% for the S&P 500 as a whole.

Long-term estimates for the Magnificent Seven remain high, but these stocks come with increased volatility. Risks to the group include elevated expectations as well as potential global weakness and heightened regulations in several of the companies. This is a good reminder to maintain diversification around the Magnificent Seven.

Can the Magnificent Seven Maintain Their Dominance?

Stocks of the S&P 500 (USD billions)

We believe a good source of diversification in 2024 will be the fixed-income market. Both stocks and bonds had a terrible year in 2022, and diversification was thrown out the window that year. For most of last year, bonds continued to struggle. It was not until the fourth quarter — when the Fed started hinting about the end of the rate-hiking cycle and potential rate cuts in 2024 — that bonds rebounded and ended the year in the positive.

The current level of money market funds is more than $6 trillion, almost double the average from 2011 to 2017. We anticipate that as the Fed provides a clearer signal for interest-rate cuts, monies will flow out of shorter-duration bonds and money market and into longer-dated bonds.

As a reminder, when interest rates fall, bond prices increase, providing a boost to bond returns. This is the main reason that bonds should be a stabilizer in 2024, as it is widely expected that the Fed will begin to reduce interest rates at some point this year. There is no hard and fast rule that says that money from money market funds must flow into equities. Those funds may flow into stocks and bonds, helping both asset classes potentially have a strong 2024.

The CD Wealth Formula

We help our clients reach and maintain financial stability by following a specific plan, catered to each client. 

Our focus remains on long-term investing with a strategic allocation while maintaining a tactical approach. Our decisions to make changes are calculated and well thought out, looking at where we see the economy is heading. We are not guessing or market timing. We are anticipating and moving to those areas of strength in the economy — and in the stock market. 

We will continue to focus on the fact that what really matters right now is time in the market, not out of the market. That means staying the course and continuing to invest, even when the markets dip, to take advantage of potential market upturns. We continue to adhere to the tried-and-true disciplines of diversification, periodic rebalancing and looking forward, while not making investment decisions based on where we have been.

It is important to focus on the long-term goal, not on one specific data point or indicator. Long-term fundamentals are what matter. In markets and moments like these, it is essential to stick to the financial plan. Investing is about following a disciplined process over time.

Sources: Carson, CNBC, FactSet, Capital Group

This material contains an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources.

Using diversification as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss of principal due to changing market conditions.

Past performance is not a guarantee of future results.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS) an affiliate of Kestra IS. CD Wealth Management and Bluespring Wealth Partners LLC* are affiliates of Kestra IS and Kestra AS.  Investor Disclosures: https://bit.ly/KF-Disclosures

*Bluespring Wealth Partners, LLC acquires and supports high quality investment adviser and wealth management companies throughout the United States.

Fidelity Investments and Fidelity Institutional® (together “Fidelity”) is an independent company, unaffiliated with Kestra Financial or CD Wealth Management. Fidelity is a service provider to both. There is no form of legal partnership, agency affiliation, or similar relationship between your financial advisor and Fidelity, nor is such a relationship created or implied by the information herein. Fidelity has not been involved with the preparation of the content supplied by CD Wealth Management and does not guarantee, or assume any responsibility for, its content. Fidelity Investments is a registered service mark of FMR LLC. Fidelity Institutional provides clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC.

After nine consecutive weeks of gains, the S&P 500 finally fell last week, marking the end of the longest win streak since 2004. The end-of-the-year rally was strong, thanks to the Federal Reserve’s pivot that signaled interest rate cuts may be ahead.

After a late comeback from bonds, last year was the third-best year out of the last 20 for a global 60/40 stock/bond portfolio. Investors have already started to worry that the Santa Claus rally fizzled out, and the first five days of the year ended down. 

The markets have seen extreme strength since late October (and remember, the markets do not go up in a straight line). Some now worry that the gains of last year are in the rearview mirror because of mixed economic data, speculation about rate cuts and war in the Middle East.

The chart below shows that the first five trading days of the year have been negative 27 times over the last 70, years and the results have been mixed. In 12 of the 27 instances, negative returns for the S&P 500 have followed for an average downturn of 15%. However, the market finished up 14 times with an average return of 13.25%. We are not ready to determine how the year is going to finish based on five trading days.

A Negative First 5 Days Could Be a Warning Sign

 S&P 500 performance when the first five days are negative

The S&P 500 remains in close range to all-time trading highs. As of this writing, the S&P is a little more than 1% below its record high, set in January 2022. Some may worry that they have missed the rally or question if it makes sense to invest at these levels. Investing at all-time highs has not historically led to a meaningful difference in future returns.

Over the last 50+ years, if you invested in the S&P at all-time highs, your investment would have been higher 70% of the time one year later, with a median return of 12%. If you had invested at any time, the median return a year later would have been 10.5%.

You know the drill: We talk regularly about not timing the market, and we don’t see these circumstances any differently. We recognize that markets are near all-time highs, but that does not mean the market is not investible or that investors should wait for a potential pullback.

Stocks Have Historically Never Failed to Regain a Prior High

S&P 500 Index level and all-time highs, 1970-present

Historically, times like these — marked by slowing inflation, solid earnings growth and the Fed easing — tend to be a good time for stocks. Analysts expect double-digit earnings growth for 2024. At the same time, when inflation has been between 2% and 3%, stocks have returned an annual average rate of 14% going back to 1950. Another interesting tidbit is that in years when the Fed has cut rates without a recession, we have seen the strongest market returns.

Stocks Are in the Sweet Spot: Moderate Inflation & Accelerating Earnings

S&P 500 annual returns in different inflation environments, 1950-2022

The recession that many have been fearing since the start of 2023 has yet to materialize, and those who have been predicting a full recession have moved to a potential “soft landing.” The U.S. economy is strong, with GDP at 4.9%, unemployment under 4% and Consumer Price Index last reported at 3.1%. At year end, there was almost $6 trillion of cash sitting in money market funds.

A healthy economy may mean that the Fed does not cut rates as much as markets expect. Current economic numbers suggest that there will be no recession in 2024. While economic conditions appear solid, the bottom line is that there are sure to be surprises in the year ahead, as there have always been. This is an important time to remember that time in the market beats timing the market and waiting for bad news to bring the market down.

The CD Wealth Formula

We help our clients reach and maintain financial stability by following a specific plan, catered to each client. 

Our focus remains on long-term investing with a strategic allocation while maintaining a tactical approach. Our decisions to make changes are calculated and well thought out, looking at where we see the economy is heading. We are not guessing or market timing. We are anticipating and moving to those areas of strength in the economy — and in the stock market. 

We will continue to focus on the fact that what really matters right now is time in the market, not out of the market. That means staying the course and continuing to invest, even when the markets dip, to take advantage of potential market upturns. We continue to adhere to the tried-and-true disciplines of diversification, periodic rebalancing and looking forward, while not making investment decisions based on where we have been.

It is important to focus on the long-term goal, not on one specific data point or indicator. Long-term fundamentals are what matter. In markets and moments like these, it is essential to stick to the financial plan. Investing is about following a disciplined process over time.

Sources: Carson, JP Morgan

This material contains an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources.

Using diversification as part of your investment strategy neither assures nor guarantees better performance and cannot protect against loss of principal due to changing market conditions.

Past performance is not a guarantee of future results.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment Advisory Services offered through Kestra Advisory Services, LLC (Kestra AS) an affiliate of Kestra IS. CD Wealth Management and Bluespring Wealth Partners LLC* are affiliates of Kestra IS and Kestra AS.  Investor Disclosures: https://bit.ly/KF-Disclosures

*Bluespring Wealth Partners, LLC acquires and supports high quality investment adviser and wealth management companies throughout the United States.

Fidelity Investments and Fidelity Institutional® (together “Fidelity”) is an independent company, unaffiliated with Kestra Financial or CD Wealth Management. Fidelity is a service provider to both. There is no form of legal partnership, agency affiliation, or similar relationship between your financial advisor and Fidelity, nor is such a relationship created or implied by the information herein. Fidelity has not been involved with the preparation of the content supplied by CD Wealth Management and does not guarantee, or assume any responsibility for, its content. Fidelity Investments is a registered service mark of FMR LLC. Fidelity Institutional provides clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC.