Dear Friends,

We hope you have been able to enjoy the beginning of spring 2023 with your family and friends, and we have some great content for you to catch up on for our April newsletter:

  • Q1 2023 Market Commentary from IEM's Wealth Management Team
  • Hearing From You! IEM's 2023 Client Survey
  • Recently on Social
  • Happenings at IEM

As always, if you ever have any questions, please don't hesitate to contact us.

Q1 2023 Market Commentary

Upcoming Portfolio Changes & Investment Themes for 2023

Dear Friends,

As we begin 2023, we approach the year with a fresh perspective while remaining cautious about the many risks persisting in the economy both domestically and globally. Markets rallied to start the year; with two out of the three major US indices seeing positive returns in the first quarter after experiencing declines in 2022. The S&P500 rose 3.86%, the Dow Jones Industrial Average fell slightly by -2.21%, and the technology-heavy Nasdaq Composite led the way with a strong 13.22% gain. (Bloomberg, as of 3/27/2023) Equity markets were supported by falling interest rates and a slowdown in inflation that boosted investor confidence across the board.

At IEM, we remain humble to our philosophy of not trying to “time the market”, and are focused on providing the best cost efficiency, risk management, and diversification for our clients. That being said, we also want to position our clients’ portfolios for the best returns given the appropriate level of risk. In order to stay true to both of those objectives, we have centered on the following investment themes as we enter 2023:

Inflation May Be Cooling

While inflation continues to run hotter than normal going into 2023, we are cautiously optimistic that inflation will continue to subside in the second half of this year and early into 2024. Housing prices - which make up nearly one-third of the Consumer Price Index (CPI) - retreated in recent months and are predicted to continue falling as the year progresses. Although we will continue to monitor inflation very closely, we are beginning to reduce exposure to inflation-protected securities in many of our fixed-income portfolios as these investments will begin to underperform in a deflationary environment.

Geopolitical and Other Macro Risks to International Markets

Due to the ongoing war in Ukraine; increased hostilities between the US and China; and the continued struggles faced in the UK due to Brexit (and other geopolitical tensions); we believe it is prudent to decrease our international market exposure at this time. Domestic US markets have outperformed international markets consistently over the last decade, and with all of the new spending on domestic infrastructure, chip production, and interest in moving manufacturing to the US - there is a strong case to be made that American markets will continue to expand and outperform international markets for years to come.  Although historically we have maintained an international exposure that is slightly underweight relative to the global stock market benchmarks (as measured by the ACWI), increased international risks and better investment opportunities to be found domestically have led us to further reduce our exposure here.

Back to Growth

Large-cap value stocks have outperformed large-cap growth stocks over the last two years on a rolling average basis. At IEM we anticipated that trend by moving to an overweight exposure in large-value stocks in our managed portfolios towards the end of 2020. While we don’t necessarily believe the outperformance of large-cap value stocks is nearing an end, we do believe the nearly 30% selloff in growth stocks during 2022 now presents an attractive buying opportunity. To take advantage of this situation, we are beginning to move some of our reduced international exposure to US large-cap growth stocks in order to increase returns in a market rebound. (Generally speaking, the stock market rebounds during a recession BEFORE the economy as a whole, and growth stocks tend to rebound the fastest.) The US market has already priced in a mild to moderate recession later this year and into 2024, so - excluding any major unforeseen economic or political events - we should be well-positioned to benefit from an eventual market rebound for our clients by adding more concentrated US large-cap growth stocks to our portfolios in early 2023.

Although our investment themes for 2023 help steer our overall investment strategy, at the core we still believe that our best work is done by getting to know our clients, anticipating their needs, and providing the best service possible. Through comprehensive financial planning, we are able to help guide and keep our clients on track to reach their goals, and investment management is just one component of an overall financial strategy. While it is very likely that we will continue to see increased market volatility throughout 2023, the overall economic backdrop is relatively solid. Unemployment continues to stay near historic lows, wage growth is at historic highs, and - despite a worldwide pandemic, increased inflation, and international conflicts - the US economy has remained remarkably strong.


While it can be challenging to avoid getting caught up in the negativity these days, we encourage our clients to take a step back and focus on the progress they have made over the years and how it has moved them closer to their goals. No one has a crystal ball to see where the market is heading next, but we hope that by focusing on our client’s needs and staying true to our investment philosophy, we can do our best work and help our clients feel confident about their futures. 


Ted Smith, Founder & Chairman, RHU, CLU®, ChFC®

Danica Goshert, Senior Vice President, CFP®, CDFA®, AIF®, MBA

Dan LaNasa, Associate Vice President, CFP®

Charles Stewart, Associate Vice President, CFP®

Marcus Schaller, Manager of Financial Planning Services, CFP®, APMA™

Disclosure: Certain sections of this commentary contain forward-looking statements based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Past performance is not indicative of future results. Diversification does not assure a profit or protect against loss in declining markets.

Hearing From You!

IEM's 2023 Client Survey

Dear Friends,

Thank you for your continued support of IEM and our team.

It is wonderful to have so many meaningful relationships as we help guide you on your financial journey in 2023. As we enter the second quarter of this year, please know we aim for success, security, and prosperity for your finances - putting you, our clients first - always.

With that in mind - we want to hear from you!

Please click on the image above to take our short client survey. We would appreciate you filling it out at your convenience.

We're consistently thinking about how to better serve you as your financial stewards. With your help, we can take an honest and in-depth assessment of our work on your behalf and how to offer you the best client experience possible.

We will do our utmost best to lead the company in a responsible and successful manner for many years to come. Thank you for your continued trust, commitment, and partnership with IEM.

In Gratitude,

The IEM Leadership Team

***The survey will be active until May 1st, 2023, and we will send out reminder communications before the deadline.

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Recently on Social

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Happenings at IEM

To round out the month of March, members of the IEM Team in Bloomington and those working remotely had some fun with an Italian-themed potluck. There were so many great dishes to eat - including Italian crockpot beef sandwiches, baked ziti, and parmesan-crusted turkey meatballs.

It's always fun to have team members bring in some of their favorite dishes and have a great time with each other!

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Integrated Equity Management

8009 34th Ave South

Suite 1550

Bloomington, MN 55425

(952) 854.5544

Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Advisor. Fixed insurance products and services offered through CES Insurance Agency.

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