2023: A Growing List of "Never Before"
From our January Client Note
2023: A Growing List of “Never Before”
2023 proved to be a year that produced a number of “never seen before” events.
Parts of the economy have stayed in contraction while others remained strong or have improved.
One measure of today’s economic climate that is in uncharted territory is the spread between how individual consumers feel about the current economic situation versus their expectations for the future.
In 2023, it has bounced around some of the lowest levels in its history. When this difference remains depressed for extended periods of time, it signals that consumers’ confidence in the future is not very positive. If this negativity carries over into actual spending, the probability of a recession rises dramatically.
Investment Themes
The Investment Themes section reviews longer term ideas that may serve as a starting point for investment decisions within client portfolios. These themes can change without notice, but are generally longer term. We actively manage client portfolios during the month, and any ideas underlying portfolio changes will not be shown until later published notes.
Long Treasury bonds. Should rally as the recession takes hold and the Fed eventually eases credit.
Remain cautious on stocks in general as earnings decline, and the Fed keeps interest rates higher for longer than was assumed earlier. Stocks have risen along with Treasurys as soft-landing hopes persist.
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If technical and fundamental data deteriorate further, then increasing defensive positions, with small short position in equities will buffer the downside.
Steer clear of speculative stocks such as SPACs and crypto securities as speculations continue to blow up.
The “Magnificent Seven” growth stocks appear very vulnerable, be cautious on taking on these high- flyers.
Avoid China , with a weakening economy, collapsing residential and commercial real estate sector, and challenged relations with the U.S.
Agriculture: Producing a more nutrient dense food crop has many benefits to society, not the least of which is reducing healthcare costs in the U.S. Investment opportunities in companies that enable a transition to farming methods at scale enabling this goal is one of the growth areas for possible consideration.
Hold extra cash to avoid market losses and prepare for eventual economic and financial market recoveries. This strategy still seems appropriate to us. Cracks in the employment market and above-Fed-target inflation imply delayed credit ease even if the Fed is done raising interest rates.
For the complete client note, review our portfolio positioning, introduce the investment team, and how our strategies are positioned going into 2024, schedule a call with our founder, John Stanton.
https://calendly.com/jstanton-1/strategy-call
John is the founder of The Stanton Group WP. With more than three decades of experience in the financial services industry, he serves as an advisor for clients, focusing on financial planning, the investment research and strategies to support their financial plan. Based in Naperville, Illinois, John serves clients in Naperville, Plainfield, Darien, Aurora, Geneva, St Charles, and throughout the Chicagoland area.
The Stanton Group WP provides investment advisory services through SeaCrest Wealth Management LLC, (the “Advisor”) a Registered Investment Advisor. Information in this message is for the intended recipient[s] only. Please visit our website www.stantongwp.com for important disclosures.
SeaCrest Wealth Management, LLC (CRD 147092) is a Registered Investment Advisor with the U.S. Securities and Exchange Commission, headquartered at 3000 Westchester Avenue Ste 206 Purchase, NY 10577.
Past performance is no guarantee of future results.
This information contained is the property of The Stanton Group WP (SGWP) and we provide it for information and educational purposes only. Since we cannot anticipate all the requisites of each individual recipient, there is no consideration given for the specific investment needs, objectives or tolerances of any of the recipients. Additionally, SGWP’s actual investment positions may, and often will, vary from the conclusions discussed herein based upon any number of factors, such as client or potential client investment restrictions, portfolio rebalancing and transaction costs, among others. Reasonable people may disagree about a variety of factors discussed in this document, including, but not limited to, key macroeconomic factors, the types of investments expected to perform well during periods in which certain key economic factors are dominant, risk factors and various assumptions used. Recipients should consult their own advisors, including tax advisors, before making any investment decision. This report is not an offer to sell or the solicitation of an offer to buy any securities or instruments, whether mentioned or not. No part of this document or its subject matter may be reproduced, disseminated, or disclosed without the prior written approval of The Stanton Group WP.
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