3/19/2024 Phoenix, AZ - Trajan Wealth’s chief investment officer, Udayan Mitra, CFA, analyzes February’s “Goldilocks” financial market. Mitra has 20+ years in investment management, a B.S. in Economics from the London School of Economics, and an MBA in Finance from Rice University. The condensed list of his insights follows; the full February Market Review can be found here: https://trajanwealth.com/blog/february-2024-market-review/

February 2024 Market Review: Highlights

- Equity markets posted a strong February based on solid earnings releases for 2023 and the perception that the FOMC’s next move will be to reduce short-term interest rates.

- YTD returns on domestic equities range from 2.68% in small and mid-cap stocks to 7.33% in the technology-laden NASDAQ.

- Bond returns continue languishing, as strong growth/employment data gives the FOMC the ability to take a “wait and see” approach to inflation trends before cutting rates.

- While we’re seeing strong growth, employment, and corporate earnings data amid decelerating inflation, looming risk makes us more nuanced about the future trajectory of returns across most risk assets. US Federal Debt is rapidly rising, consuming an increasing percentage of the Federal budget. Because of this, we’re cautious about intermediate and long-term interest rates.

- While the FOMC cuts short-term rates, we don’t expect commensurate declines in the rates that determine corporate borrowing or household mortgage rates. Increased debt servicing costs, both in the government and private sectors, act as headwinds to business investment, consumer spending, and government spending to stimulate the economy going forward relative to the past few decades.

Trajan Wealth Recommendations:

- We have a cautious outlook for the performance of risk assets. Therefore, we advocate for an elevated level of diversification across asset classes and develop specific asset allocation perimeters that cater to individual risk-tolerance thresholds.

Fixed Income assets should command a higher weighting in most portfolios. With interest rates projected to be higher in the next cycle compared to the past, we believe there is a large possibility of “repricing” in certain interest rate-sensitive sectors.

- If it’s been over 24-36 months since you’ve had one, schedule a portfolio review, where we’ll discuss the opportunities in alternative investment offerings.

“The financial crisis was linked to the fact that banks had excessive leverage and too many risky assets. The solution is not to try to dictate to banks what they can do or not do, but to require them to strengthen their capital to absorb potential losses and hold less risky assets.”
- John Paulson, Former Treasury Secretary

Read the full article for more details and infographics: https://trajanwealth.com/blog/february-2024-market-review/

About Trajan Wealth
Trajan Wealth, LLC, was founded in 2012 by CEO Jeff Junior. Before his 20+ years in the financial services profession, Jeff served in the United States Marine Corps. He continues to serve his clients and employees with the utmost service, respect, and attention to detail. The firm has multiple locations in Arizona, Colorado, Florida, Georgia, Texas, and Utah.

By using low-cost, diversified portfolios under its fiduciary standard and working closely with its investment advisors and estate attorneys, who work within one office, the company provides long-term support for client's retirement needs and estate plans, including wealth accumulation and tax planning strategies.

For more information on services offered or to schedule a complimentary consultation, visit https://trajanwealth.com or call 1-800-838-3079.

Disclaimer:
* Advisory services offered through Trajan® Wealth L.L.C., an SEC registered investment advisor. Legal services are offered through ​Trajan® Estate, L.L.C. ​in Arizona and Utah, and independent law firms in other states.