July 3 For 3! July 16, 2024 Keep Calm and Diversify On As summer, the Mag7/Fab 5 and earnings season continues to heat up, we send you a calm & cool, “We’ve got you managed.” We just closed the second quarter (Q2) of 2024. Stats will show that the average stock did not perform well in Q2, but the biggest stocks did, creating a notable disparity between what our friends and tacticians at Dorsey Wright & Associates are calling “the generals of the S&P 500 and the soldiers.” Here’s the data; The S&P 500 (SPX) gained nearly 4% in Q2 while the S&P 500 Equal Weight (SPXEWI) lost over 3%. SPX has posted over 30 all-time highs this year, yet SPXEWI has closed at an all-time high less than 10 times. That spread (20+) is the largest between the two indices since 1990. The five largest stocks in the S&P 500 have accounted for nearly 60% of the broad index’s year-to-date return, with the top 20 accounting for over 75%.  NVIDIA alone accounts for roughly a third of the year-to-date SPX return. As for small-cap stocks, it has been over 950 calendar days since the Russell 2000 made an all-time high. The “generals” continue to fight alone the above stats would offer. It is easy to think that metaphor does not apply to the stock market given the increasing weight of the Magnificent Seven (or Fab Five), but at some point, it will be true that the matter that the generals cannot fight the battle on their own. We remain vigilant in our diversification efforts–and proudly, this is not detracting greatly from Mag7/Fab5 outperformance.  (Source: Dorsey, Wright & Associates, LLC) While its true that a dart could be thrown and performance among the “generals”  has been easily earned in portfolios YTD and the last 12+ months. Yet, earning respectable YTD double digit returns in Alphavest Models like Nu Holdings/NU +60.14% and our sleepy Walmart/WMT +32.46% are why you should be sleeping at night. We aren’t asleep–therefore you should be! To conclude on a more bullish note, the S&P 500 has posted positive returns in July for nine straight years. However, this year could be different given that past election years have produced more muted returns. Since 1928 the S&P 500 has averaged a 0.3% gain in July (during election years) and has been positive just 44% of the time.  July 3 for 3 CIO gleanings, Fool’s Gold and Winners/Losers  Multi-asset class Outsourced Chief Investment Officer (OCIO)   Investment Strategist • Client Portfolio Manager • Public and private markets BA Northwestern University MBA/Finance Northwestern-Kellogg School of Mgt  The US economy slowed late in the second quarter, markets saw some volatility, and there have been rumblings of an AI pushback, with Goldman Sachs recently going so far to imply that the AI boom was essentially a remix of the dot-com bubble, to loosely quote the Financial Times. As we kick off the second half of the year, do we see warning signs? We wanted to break down some of the key factors driving markets, and our take on portfolio positioning. Economic Growth As mentioned above, though the U.S. showed signs of slowing late in the second quarter, and activity in Europe and the U.K. picked up a bit, the US still leads global growth by a large margin: GDP: the US leads the rest of the world Employment Overall, the jobs picture looks good. In the US and globally, unemployment remains low, and we expect global labor market strength to persist. Importantly, wage growth is exceeding nominal inflation: Inflation Inflation is lower, but not low enough. Inflation is expected to remain in a new-normal range that is consistently higher than was recorded after the Global Financial Crisis of 2007 to 2009 and before the onset of the pandemic in 2020. Labor cost growth has decelerated in many countries, including the U.S. While this should help inflation pressures ease further, we believe core inflation measures will remain higher than central banks would prefer to see. Monetary policy A number of central banks were expected to meaningfully loosen interest rate policy in 2024, but thus far, only a small number have, and they have done so tentatively. Cyclical upturns, still-strong labor markets, and elevated inflation are likely to keep interest rates at or near current levels for a time. The year has been frustrating for traditional fixed income portfolios, but Alphavest’s positioning in fixed income has significantly outpaced that of the broad bond market. More recently, given the interest rate outlook as the Fed continues to appear to be on hold, we shifted a significant portion of fixed income portfolios to cash, which currently earns 5-5.5% – or 2/3 of the expected return for US equities… Geopolitical risk The overall backdrop hasn’t changed much year to date, but geopolitical risk remains above neutral. War in Eastern Europe remains a slog, hot spots continue to flare in the Middle East, and China-Taiwan remains a worry. We have always had geopolitical tensions to contend with – the question is whether your portfolio is diversified enough to manage those risks. Today, Alphavest’s core portfolios have very modest amounts of opportunistic international exposure. This includes broad exposure to emerging markets, targeted exposure to India, and specific high-conviction stock picks in Brazil and Taiwan, to name a few. We continue to assess potential candidates for this higher-growth area of the portfolio. Above all, we know that our mission goes beyond preserving and growing your capital, and that bespoke advice, planning and education for you and your loved ones are so critical. We aim to listen to your questions, offer perspective and guidance, and achieve success according to your definition, over the long term. We look forward to reconnecting in August at our Halftime Event in Charleston, SC on 8/20 to discuss key themes identified in the January at our 2024 Courageous Leadership KickOff Event and the horizon between now and year end – and beyond!  I welcome your comments or questions in the interim; [email protected]. Partner with Alphavest! Inquire about Alphavest Partner POINTS for Events, Reviews, and Referrals! What Investors Need to Know NOW (WINK): Fool’s Gold? Gold boasts a 14% year-to-date (YTD) gain, but the precious metal has been consolidating since April. In fact, all of gold’s YTD return came between February 20th and April 12th. We know that fear and real yields are common catalysts for gold, and are often intertwined. Since mid-April interest rates have gone virtually nowhere, inflation data has been relatively flat/down, and the major equity benchmarks have been drifting to all-time highs. Additionally, geopolitical headlines have been fewer and further between…a recipe for sluggish gold behavior. That said, should any of those variables change gold could have a meaningful breakout – whether it be to the upside or downside. What about the US presidential election? While certainly a potential catalyst for a gold breakout, history suggests it would be to the downside…which is perhaps a surprise. Markets are forward-looking, so maybe investors front run here too? The progression chart below graphs the average change for gold continuous (GC/) each day, and then separates each into term year. The thick, black line below is the average progression during the fourth year of a president’s term/election year. We are about 140 days in currently. Source: Dorsey, Wright & Associates, LLC WINK BOTTOMLINE: Now that you’ve gotten a primer on Gold in 2024 and how it performs, on average, in each of the 4 years of an election cycle—Let the idea of gold GO—and TRUST our active management style at Alphavest. We’ll add a nugget to the portfolio when we think it’s time. Winners & Losers YTD, 30-day Portfolio Winners: While NVIDA may be all the talk, Taiwan Semiconductor/TSM is first AI downstream to win when NVDIA wins…so, its Taiwan Semi, 3 months running for the YTD win in our Alphavest 10 Year High Conviction Model +19.88% (vs. 19.72% S&P 500) YTD. All of our 30 day winners show the strength in our Alpahvest diversification efforts with financial and energy on the Leaderboard. Truist/TFC, KeyCorp/KEY held in our Alphavest Equity Income Model +13.11% (vs. 9.78% Dow Jones/DJIA) YTD and boasting a dividend yield of 2.24%. Alternatively, EOG Resources/EOG, is an Alphavest Aristocrats Model holding +15.75% (vs. 9.78% Dow Jones/DJIA) YTD with a dividend yield of 1.54%. YTD, 30-day Portfolio Losers: McDonald’s/MCD continues to be the lone double-digit detractor of performance, YTD. With the likes of OTHER asset managers’ widely held names like Nike/NKE -34% and Intel/INTC -31%, we’re HOLDING our “losers” for now. With Morningstar 3 & 4 Star ratings and with undervalued share prices amidst a froathy market, are among the reasons we continue to HOLD these positions, yet we continue to monitor daily.  Vanguard Extended Duration Treasury/EDV tops the 30 day loser board -3.85% YTD. Elizabeth Breaden, Alphavest’s CIO addresses fixed income struggles, above. NOTE: Both our Fixed Income models; the Alphavest Fixed Conservative +3.03%YTD and the Alphavest Fixed Aggressive +2.51%YTD are outperforming the Broad US Bond Market Index Core US Aggregate Bond ETF /AGG +0.60% YTD.  We have no concerns to share with other 30 day losers, below, specifically, Qualcomm/QCOM with a YTD return of +43.94%. ‘

Text OR Call  866-MOALPHA (662-5742) Call Only 843-573-7277 [email protected]

As always, sending you a Perfect Day,

Advisory Services offered through Red Triangle, LLC DBA Alphavest

PS: Reach out to us to test drive a customized Morningstar Report! AND get your Alphavest Altruist LOGIN for easy to to understand account performance tracking! TEXT US TODAY.

Subscribe to this monthly update.

AND–if you enjoyed this 3 For 3, the greatest thank you is a comment here or forward it to a friend (and you’ll rack up some Alphavest Points!)