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Effective Date:  March 31, 2024


The stock market continued its robust performance and closed the quarter at record highs. The strength is attributed to stronger than expected economic growth, coupled with the anticipation of interest rate adjustments by the Federal Reserve later this year. The most recent inflation metric released on March 29, 2024 showed the Fed’s preferred inflation reading (PCE) to be 2.5%. This rate is likely acceptable to the Fed, considering their target for the average inflation rate is 2.0%. This data point increases the likelihood of interest rate adjustments in the coming months. The outlook for 2024 remains positive, although we anticipate markets to trade sideways leading up to the presidential election. Your portfolio was rebalanced late last year and slightly tilted towards a more aggressive stance given the market returns observed so far this year. We will continue monitoring allocation weights and likely rebalance later this year ahead of the election.


                                  S&P 500

                Russell 2000

MSCI EAFE International

MSCI EM Emerging Markets

Barclays Aggregate Bond

10 YR Treasury Yield







The table above illustrates year-to-date market performance. As anticipated, both US and international stock markets have started the year on a positive note. The 10-year US Treasury interest rate rose from 3.9% to 4.2% as bond markets adjusted to economic data coming in better than expected. On March 20, 2024, the Federal Reserve released its most recent Summary of Economic Projections (SEP) along with a statement and press conference. In an extraordinary move, the Fed increased their economic growth estimate for 2024, lowered their unemployment rate estimate, raised their inflation estimate, and yet signaled a probable reduction in interest rates later this year. Markets responded positively to this information, resulting in the best week of the year so far. This acknowledgment from the Fed suggests that despite positive economic growth, they recognize the need to reduce interest rates. This is positive news for both stock and bond markets.




Market momentum

Market indicators

Monetary policy


US Economy & Earnings


US equity valuations

Interest rates


Israel & Ukraine wars

Investor sentiment

No changes were made to the Market Indicators table this quarter and our market outlook remains unchanged. We have a positive outlook for 2024 due to continued economic strength and the expectation that the Fed will cut interest rates this year. Lower interest rates are good for asset prices like stocks, bonds, and real estate as the discount rate used to calculate the value yields a higher price. The evidence based / quantitative market indicators we track are positive. One example is according to Ryan Detrick there have been only 11 out of 74 years since 1950 that the S&P 500 was up more than 10% in the first quarter like 2024. The final nine months of the year was positive all 11 times and had above average returns for those 9 months. Past returns are not a guarantee of future performance, and we understand some skepticism of data, but this information is demonstrating market momentum which is a known, documented, and observable market situation.

There are three known primary risks to the positive market outlook for 2024. While none of the following are the base case scenario, they are possible and could adversely affect markets. First, inflation could reemerge, prompting the Fed to refrain from cutting interest rates or even hike them further. Second, escalation in one or both of the regional conflicts in Ukraine or the Middle East could draw direct involvement from the US or European nations, potentially disrupting markets. Lastly, civil unrest stemming from the US Presidential election could disrupt the economy and markets. Although we do not anticipate these risks materializing, any of them, or other unforeseen events, could lead to a swift market correction. In such instances, we will assess the longer-term impact and make necessary adjustments.

In 2018, we encountered demographic research from one of our research providers, FundStrat, which significantly influenced our long-term economic and market views. While we have shared this information previously, the essence of it suggests that the 2020s may resemble the 1990s, driven by the transition from a Baby Boomer-dominated economy to one led by Millennials. Two key takeaways from the 1990s that could be unfolding are higher economic growth compared to the period from 2000 to 2020 and elevated inflation. This long-term perspective does not alter our shorter-term tactical market views but provides a positive outlook for the long-term. As we approach the mid-point of this decade next year, this view has proven to be true thus far.


As mentioned in our previous market update, the primary long-term economic and market risk lies in bringing US deficit spending and total debt back to sustainable levels. Economists suggest that deficits of 3-4% of GDP are sustainable in the long-term due to inflation and population growth. However, the latest US Federal deficit stands at 6.3% of GDP, which is unsustainable. Failure to rectify this could lead to higher inflation, increased interest rates, and diminished economic growth, resulting in lower inflation-adjusted returns for stocks and bonds. Rectifying these deficits would likely necessitate changes to Social Security, Medicare, taxes, and spending.




Your portfolio is aligned with its long-term asset allocation target, rebalanced in December 2023 after being overweight in equities to capitalize on the market recovery. The plan for the remainder of 2024 is to maintain portfolio allocation close to long-term targets until after the election with regular adjustments made based on dividends, deposits, and withdrawals.

Brian West, CFA, CPA
Chief Investment Officer
(515) 284 1011
111 East Grand Avenue, Suite 412
Des Moines, IA 50309
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