It’s your monthly 3 For 3!

Its Your April 3 For 3! April 16, 2024  Peck, peck, peck…bam. Peck, peck, peck, bam. “Our” cardinal, “Ginny” (Virginia state bird–and yes, we named HIM Ginny) has begun his annual knocking on the bathroom window, and one of life’s less pleasing certainties is, 4/15, tax day, has come and gone. What other sureties of life, constants, like Ginny at the window in spring and tax day do I find to be true? In the spirit of 3 for 3;  Pain, uncertainty and the need to always be growing.  These 3, like Ginny and Uncle Sam, while they represent the constants I find to be true in life, interestingly seem to represent markets, too. While it seems for the last 9 months (ok, 100+ years), markets have only been growing, we all know the pain and uncertainty that came along the way. Groupthink (I believe you’ll enjoy Elizabeth’s piece to follow) would want you to be afraid of the market’s uncertainties for fear of pain, AKA portfolio losses. We know better. YOU know better. We know how a 3-6-10 allocation plan protects and performs; prioritizing lifestyle (your spending needs)–honoring risk over return. If your blood pressure didn’t drop slightly or you didn’t experience that “oh, yeah, that’s right, my plan is solid,” then its time to book an appointment and get the confidence that comes with a deep understanding of your 3-6-10 Plan.  Our Alphavest Dynamic Core Equity Model (+21.49 v. 24.25% 1 YR and +6.46% v. +6.56% YTD) is half in cash as of 4/16/2024. Like I wrote–nothing to fear. We’ve got you managed. Enjoy the growth and don’t fear the uncertainty and pain. Its part of the package. Like April 15th and Ginny–it’ll always be around the corner. Its how you choose to experience it. Enjoy this month’s commentary from Alphavest’s Chief Investment Officer, Elizabeth Breaden. April Lunch & Learn:   4/25/2024 NOON Give Savvy:  How to savvy up and destress annual charitable giving and grab a bigger tax break. Get a JUMP on year-end giving! ONLY 14 spots! Grab and friend and grab a spot!  Kitchen Karma by SOL on the Patio @ Alphavest Offices Investing IN Women-Goat Yoga Round 2! June 8th @BackBarn Bedaw Farms Panel speakers TBA 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  Vive la différence? The French have a saying that “to disagree is to exist.” Being entrenched in French corporate and family life for a couple of decades compelled me to integrate this notion, and just how far it goes in certain cultures. Today, I appreciate and even relish a good honest argument around the dinner table or in the boardroom. As CIO, I believe that healthy disagreement is essential in order to appropriately weigh all investment outcomes, not just the preferred scenarios, and embracing the fact of different points of view can also improve empathy and creativity. With that I give you my April 3 For 3, along with my encouragement of even the most differing of opinions or feedback– April 3 for 3: Groupthink? Today, it makes me chuckle to hear that Fed Chair Jerome Powell may, ahem, disagree with that, at least when it comes to Fed governors voting on monetary policy. Here are the on-the-fly headlines from Jay Powell’s latest press conference on March 20: That last line is problematic. With 12 voting members in the Federal Reserve Board of Governors, a vote is a vote, n’est-ce pas? 8 to 4 or 7 to 5 would still be a majority vote. Holding out for unanimity seems like idealizing groupthink. It gives the minority an enormous amount of power, creates groupthink and could be the Fed’s downfall. In addition, didn’t the Fed swear off calendar guidance under Janet Yellen, and instead adopt “data dependent” positioning? In last month’s 3 for 3, we did examine the data case for lowering rates, and to no avail: by all counts, the US economy appears to be handling the current level of interest rates (all the more so after last Friday’s Nonfarm Payrolls report which exceeded hiring expectations and revised the previous months’ surveys upward). Interest Rates and the Stock Market If as we believe inflation and interest rates do stay “higher for longer,” how will the stock market contend with higher rates? The cost of money does matter to the market, especially when today’s 5% bond yields deliver close to 2/3 of the 8% expected return for the US stock market. John Authers recently wrote on Bloomberg that capital is being deployed to areas of the market that should benefit if inflation and rates continue to go up: “Rising bond yields mean lower bond prices, but they don’t hurt as much if they’re driven by a strong economy. As it is, the gains in stocks have more than counteracted problems for bond portfolios,” and should continue to do so as long as the credit market remains tight, that is, until companies run into maturity walls where they need to refinance the lower-rate debt of years past. Taking this a step further, Authers refers to the chart below, published by Société Générale Cross-Asset research, which clearly shows that in the US and Europe alike, stocks that tend to do well in rising rate environments have outperformed year to date. Authers also takes a look at the performance drivers across value and growth stocks, and surmises that “growth companies are less exciting when the whole economy is turning upward, because what they offer is no longer scarce.” Opportunities beyond Tech: Alphavest Q1 2024 Equity Performance We have found the above observations – that the US stock market rally has broadened far beyond technology stocks – to be true in examining Alphavest’s top single stock performers year to date, which the table below details. First, within the Aristocrats model, EOG Resources (added in late 2023) and Pentair (a long term holding) have delivered 7.28% and 16.09% respectively year to date through March 31. The Aristocrats portfolio also benefited from eliminating West Pharmaceuticals earlier in the year. Within the Equity Income model, we recently added Truist and KeyCorp banks, which increased by 3.93% and 7.57% respectively, year to date. We also increased our exposure to Exxon Mobil, a position that has returned 17.01% year to date. The Equity Income strategy has also benefited from the fact that we sold our 5% Apple position earlier this year. Turning to negative year-to-date (through March 31) performers, we note above all that marginally negative returns have affected fixed income allocations as rates transition to higher levels – we continue to expect fixed income to be rewarded this year since we began the year at higher absolute yield levels, and as the credit environment is healthy. As for underperforming stocks, we note that Amgen was added in early 2024 at a very attractive valuation. McDonalds, a long-term holding, is in our opinion poised for a growth inflection as unit development and operational initiatives take effect, particularly in international markets. Lockheed Martin was eliminated in late 2023. Our long term equity strategy is to provide our clients with unbiased access to the equity risk premium, meaning that we are agnostic with regard to style, and opportunistic in assessing new ideas. As always, we continue to monitor the risk, diversification, and performance impacts of these positions in the broader context of global growth, macro factors, and our market views, with your goals firmly in mind. If you have any questions about the above, please don’t hesitate to ask! Winners & Losers YTD, 30 day Portfolio Winners: YTD, 30 day Portfolio Losers: All YTD losers are bond portfolio holdings (thanks to having sold Apple -10.52% YTD) From Cokie’s Lens: “Cousins” Boone Hall Strawberry festival, 2015. Get full content and don’t miss the email! Subscribe to Cokie’s Blog. Click HERE for Alphavest Blog Want your customized Morningstar Portfolio report?  TEXT/Email us “REPORT” We’re excited to share with you our latest tech upgrades! April Lunch & Learn:   4/25/2024 NOON/Location TBD  She GIVES Savvy:  How to savvy up and destress annual charitable giving and grab a bigger tax break. Get a JUMP on year-end giving!    Investing IN Women-Goat Yoga Round 2! Plus Panel Speakers TBA June 8th @BackBarn Bedaw Farms

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