Third Quarter of 2024 Commentary: Thank You, Federal Reserve! 

• As you might imagine, bonds, utilities, and some REITS put in solid performances, thanks very much to the fight against inflation by the Fed. The rate cut of 50 basis points showed that the Federal Reserve was not afraid to step up when necessary.
• On the equities front, in the middle of the summer, and during the bull market, it looked like we were going to have some pullbacks; however, most equities were back to their old highs at the end of the quarter.
• The bloom is off the rose as it relates to what seemed to be the never-faltering sector of the market: big tech. Now, it seems that the market has reallocated monies into more value stocks. Small companies and value stocks are performing well.
• Not many of the Wall Street pundits talk about our growing national deficit. This could be a big shoe to drop in the future unless our political leaders begin the fight. Otherwise, the economy is being perceived as growing at a healthy rate with inflation easing to a new three-year low.
• Energy and telecommunication stocks are still viable. We believe that in this “high” market, exposure to energy is almost a hedge against a downturn. Exxon (XOM) is a perfectly integrated oil company that we are attracted to. Additionally, we would add Verizon (V) positions.
• At our most recent investment committee meeting, we talked about being defensive to a degree. The economic data, particularly, initial jobless claims rising to the highest in 14-months, point to the potential for a slower rate cut cycle in 2025 as the Federal Reserve will need to deal with lumpy economic performance indicators. In essence: we are not out of the fight against inflation. Because of this, we like Walmart and Costco. They are long-term and will not make you a bounty overnight, but both are well positioned on a balance sheet basis and could hold us in good stead if we have more inflation or a recession. Neither scenario is one that we see happening right away.
• Lastly, our goal would be to trim some gains this quarter and reinvest into some of the companies and strategies to which we are committed. For example, our firm utilizes dollar cost averaging to aid in getting a better price on the stock in high markets. We have used this strategy to everyone’ s benefit in the past, and we will continue to do so.
• And finally, as a reminder: we predicted a bull market in the 2nd half of the year. Our only caveat to that concept is Washington D.C. politics. We will see, but our clients are well positioned for future volatility.

We wish you a wonderful fall season and please reach out with any questions or thoughts.

Thank you, Zandy Campbell