Broker Check

Q1 2024 Portfolio Updates

| January 17, 2024

We ended 2023 with a big lift in stocks and bonds with the Federal Reserve (Fed) poised to end its campaign of interest rate hikes.  At least some rate cuts are expected for 2024.  You can find our full 2023 review and 2024 outlook herehttps://www.retirement-professionals.com/2023-investment-review 

Quarterly Changes

We increased equity (stock) exposure back to neutral based on the improved fundamental and technical picture for the market.

We are maintaining the smaller “value” companies we rotated into last quarter.  These did exceptionally well last quarter and in fact were the best performers in our “universe” of funds we pick from.  They are not as well-known but could be comparatively undervalued (ever hear of IDEX, Builder’s FirstSource, or Booz Allen?).

After riding larger “growth” companies (like Apple, Microsoft, and Nvidia) for most of the year, which did outperform broader markets, we switched out into large “value” companies (top holdings include Warran Buffet’s Berskshire,  Johnson and Johnson, Walmart, and Intel). 

Both smaller companies and value stocks could do well in 2024 if the market rally broadens beyond the “Magnificent 7 stocks”. 

Neutral on international. Not favoring international as a whole but based on our models we changed from Japan to Europe. International, in general, did perform closer to domestic markets last quarter as the dollar declined moderately.  Any interest rate cuts or related expectations could impact the dollar and favorability of international stocks (a trend we watch). 

For the first time in many years we adjusted our weightings in bonds due to the fundamental outlook with a Fed poised to end its rate hike campaign and likely to cut rates in 2024.  This is largerly due to an improving inflation picture closing in on the Fed’s target rate.  Accordingly we lowered exposure to short term bonds, an area that helped us tremendously the past couple years, and added to intermediate term bonds.