Dear Greg,

The fourth quarter was a rewarding one for investors. After mixed results for the first nine months of 2023, the Fed appears to have gotten inflation under control pushing interest rates lower and resulting in positive results for domestic equity, international equity, fixed income, and gold.

The U.S. and International stock markets both increased in the fourth quarter, up 12% and 10%, respectively. Lower capital costs around the world resulted in investors seeking out higher risk/return investments. In addition, low unemployment and respectable GDP growth helped corporate earnings. Going forward, more government spending on infrastructure could help accelerate growth in 2024. Plus, a more dovish Federal Reserve could improve the outlook for interest rate sensitive stocks around the world. It now appears the Feds’ tightening cycle ended in July and historically, stocks have performed well following the end of a tightening cycle.



Fixed Income performance was positive in the fourth quarter with the aggregate bond index up 7% and long duration corporate bonds up 14%. The 10-year treasury yield decreased from 4.6% at the beginning of the quarter to 3.9% at quarter-end (bond prices generally increase as rates decrease). This decline in yields was likely driven by annual CPI falling from 3.7% in August to 3.1% in November. Safe short-term investments like CDs, Treasury Bills, and money markets, continue to look attractive yielding in the 5% range.