“Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.” - Dave Ramsey.

Trajan Wealth’s chief investment officer, Udayan Mitra, CFA, analyzes May’s financial market and provides recommendations. His condensed insights are below; you can read the full review here.

May 2024 Market Review
- Strong Q1 2024 US earnings eased fears of economic cooling due to higher borrowing costs. Fed Chairman Jerome Powell's conciliatory language following the May 1st FOMC meeting reassured markets of potential rate cuts, leading to a sharp rebound in global markets. YTD returns on US equities range from 3.32% in small and mid-cap stocks to 11.82% in the NASDAQ. Bond returns are recovering as yields trend lower with the Fed’s dovish stance.

- Corporate earnings, especially in AI-related sectors, are driving strong performance in large-cap stocks. NVIDIA Corp.'s stock is up 141% YTD, driven by significant revenue and EPS growth. Big Tech companies like Microsoft, Meta, Alphabet, and Amazon have also posted strong returns. However, market performance remains concentrated in a few stocks.

- A cautionary note is the high valuation of the S&P 500, with a P/E ratio above 25x, significantly higher than the long-term average of 19x. Valuations depend on interest rates and inflation expectations, with future bond yields impacting stock performance.

- US non-farm productivity is rising, driven by AI, data science, and robotics advancements, boosting EPS growth. However, aging demographics pose challenges, with an increasing dependency ratio and funding issues for Medicare and Social Security, potentially leading to higher taxes or borrowing.

Portfolio Enhancement Possibilities With Private Markets
- For eligible clients, we recommend calculated allocations to private assets—including equity, commercial real estate, infrastructure, and credit—to capture illiquidity premiums and potential manager “alpha” from skill, access, and club-deal networks.

- For clients/prospects interested in exploring these portfolio enhancement possibilities, please call our Portfolio Management Group at 1 (800) 799-3320.

- We continue to advocate an elevated level of diversification across asset classes and develop specific asset allocation perimeters that cater to individual risk-tolerance thresholds.

Given our outlook for more moderate returns going forward and the prospect of higher taxes, clients may want to save and invest a greater proportion of their disposable income.

Read the full May Market Review here: https://trajanwealth.com/blog/may-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.

By using low-cost, diversified portfolios under its fiduciary standard and working closely with its investment advisors and estate attorneys within one office, the company provides long-term support for client's retirement needs and estate plans, including wealth accumulation and tax planning strategies. The firm has locations across Arizona, Colorado, Florida, Georgia, Texas, Utah, and soon Illinois.

For more information 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. Private equity may require accreditation.