Quarterly Review and Outlook - January 2024

Dear Clients and Friends,

Yesterdays are over my shoulder, so I can't look back for too long.

– Songwriter Jimmy Buffet, d.2023

2023 was a remarkable year for the US financial markets. The capitalization-weighted  S&P 500 stock index rose more than 26% on a total return basis, driven by outsized  performance among several of the largest companies in the index. Notably, the average stock in the index finished 2023 with a very respectable gain of almost 14%, using Invesco’s equal-weight S&P 500 fund as a performance proxy [1], despite having been negative on the year with only two months remaining. The broadening of equity market returns in the last two months belies the popular notion that only a handful of stocks were responsible for nearly all the index’s gain last year.

Perhaps even more noteworthy, the US Treasury yield curve ended 2023 looking very much like it did at the start of the year,[2] despite significant volatility along the way.

Rates had moved higher for much of 2023, with the 10-year Treasury nearing 5% for the first time in over a decade,[3] until declining inflation pressures and other moderating datapoints pushed the Fed to change the timbre of its communications and even hint at possible interest rate cuts in the new year.[4] Bond prices rallied and yields fell in response to the change in the Fed’s attitude, with the 10-year Treasury down to 3.9% at year end. However, ultra-short rates (for bonds maturing in 6 months or less) remain at an elevated latitude and likely won’t drop much until the Fed officially lowers the benchmark Fed Funds target rate.

Paying no heed to the doom-and-gloom economic predictions that pervaded the financial headlines this time last year, economic activity hummed along in 2023 with real GDP estimated to have risen over 2% for the year[5]– consistent with our oft-repeated view of a “slowing but still growing” economy. The slow but steady expansion kept pace in spite of a minor banking crisis in the first quarter of the year and the threat of a US debt default in the second, in part due to ongoing strength in the labor market. Though the official figures are not yet available, the US unemployment rate is expected to have held steady at 3.7% last year, according to Wall Street consensus estimates, continuing the longest streak of below-4% unemployment readings since the 1960s.[6] Also, inflation measures have declined meaningfully from the 8% annualized CPI level we experienced in 2022, to a sub-3%
consensus CPI estimate for the final quarter of 2023.[5]

If you can look into the seeds of time and say which grain will grow and which will not, speak then unto me.

– William Shakespeare, Macbeth, Act I

 Unlike Macbeth’s three witches, we are not in the soothsaying business – we merely use what tools we have to help us anticipate likely market outcomes under various scenarios, some highly probable, some less so, and to guide our clients accordingly. As we have noted in our letters to you over the past several quarters, we have remained cautiously optimistic regarding the outlook for stocks and bonds, while acknowledging that any pathforward may have pitfalls which entail tactical  djustments to a portfolio or to a financial plan. In the context of amoderately slowing economy with still-strong corporate earnings and potentially declining interest rates, our base view remains unchanged. The primary risk to our outlook, we believe, is that growing consumer debt, waning capital spending levels[7] and ongoing problems in the commercial real estate sector become stronger economic headwinds than they currently appear to be.

There are, however, a few things we can expect with certainty in the new year, such as the fact that there will be a presidential election in the US in 2024. (The uncertain part: does it matter to financial markets? Possibly, which we’ll surely discuss later in the year.) Other items tied to the turning of the calendar include:


  1. The annual gift tax exclusion increases to $18,000 per individual in 2024.
  2. IRA contribution limits rise to $7,000 for those under 50, and $8,000 for those 50 or older.
  3. Allowable employee contributions to most retirement plans (e.g., 401k, 403b, and the Federal Thrift Savings Plan) increase to $23,000.
  4. Investors with a Roth 401k or Roth 403b will no longer have to take required minimum distributions.
  5. Unused 529 plan assets may be eligible for a Roth IRA Rollover, with some limitations.

Those are just a few of the changes now in place, and there are several more new and noteworthy items that may be relevant to your personal financial situation. As always, we encourage you to reach out at any time to discuss your portfolio to ensure your mix of assets is appropriate and aligned with your financial goals.


In case you missed it, our own Joni Alt, CFP®, EA, was named Chair-Elect of the National Association of Personal Financial Advisors (NAPFA) for the 2023-2024 term. NAPFA is the country’s leading professional organization of Fee-Only financial advisors – highly trained professionals who are committed to working in the best interest of those they serve. We’re proud to have Joni on the Evermay team!

Also, we are excited to announce that Brian Fyock, CFP®, CPA, has joined us as Director of Wealth Services for the Legal and Consultant Industries. With over a decade of experience as the CFO of a law firm prior to joining Evermay, Brian specializes in working with law firm partners to provide holistic and tax-efficient financial planning and wealth management. Welcome to Evermay, Brian!

With warm wishes for the new year,

Mitch Schlesinger
Chief Investment Strategist





[1] FactSet data, total return for S&P 500 and Invesco Equal-Weighted S&P 500 ETF

[2] FactSet, US Treasury Yield Curves 12/30/2022 and 12/29/2023

[3] FactSet, 10-year US Treasury yield history, past 20 years as of 12/29/2023

[4] CNBC, 12/13/2023

[5] FactSet Economic Estimates

[6] JP Morgan, “Balance Sheets and Resolutions,” 1/2/2024

[7] Represented by S&P Global US Manufacturing PMI as of 1/2/2024



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Please remember that past performance is no guarantee of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Evermay Wealth Management, LLC [“Evermay]), or any non-investment related content, made reference to directly or indirectly in this commentary will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this commentary serves as the receipt of, or as a substitute for, personalized investment advice from Evermay. No amount of prior experience or success should not be construed that a certain level of results or satisfaction if Evermay is engaged, or continues to be engaged, to provide investment advisory services. Evermay is neither a law firm, nor a certified public accounting firm, and no portion of the commentary content should be construed as legal or accounting advice. A copy of the Evermay’s current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request or at www.evermaywealth.com. 

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