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Financial Markets and the Economy

Stock markets gained broadly in the first quarter of 2023.  Domestically, US large cap stocks as measured by the S&P 500 were up 7.5% for the quarter and US small cap stocks as measured by the Russell 2000 was up 2.74%. Globally, the developed international markets as measured by the MSCI World ex USA Index was up 8% and emerging markets equities as measured by MSCI Emerging Markets was up 4%.  While it may not feel like it after last years’ pullback in the stock and bond markets, the US equity market has experienced a historically strong bull market returning over 12% over the past 10 years annualized, as measured by the S&P 500 Index.   Bond indexes were also broadly positive for the first quarter with the Bloomberg US Aggregate Index increasing 3% for the quarter. 

The broadly positive returns for the quarter masked the volatility so far this year.  Sharp swings in bond and stock prices were largely driven by the Fed trying to balance continued inflation with unrest in the banking sector, all while trying to navigate a “soft landing” with the economy.  The capital markets continue to wrestle with how returning to a “normal” policy after an extended period of artificially low interest rates and a flood liquidity will play out.

Similar to nearly all other time periods, there are no shortage of factors creating uncertainty in the capital markets.  The most recent headlines relate to runs on large financial institutions, inflation, the Fed’s interest rate policy, company earnings, the war in Ukraine, tensions with China, among others.  We could go to almost any past point in time and come up with a different but also unnerving list of things to worry about.  As always, we believe the best approach to navigating this environment is to have a well-diversified portfolio that is tailored to your unique balance sheet, goals and objectives, and risk profile.  We will continue to discuss your allocation to short-term fixed income and cash relative to your near-term cash needs to confirm your portfolio is well positioned to navigate through calm and rough markets.


As you are already aware, we at Waypoint have been implementing a “Planning Roadmap” to provide focus to your meetings with us throughout the year. For many of our clients, their first meeting of 2023 focused on cash flow planning and investment management. During the next quarter, we’ll be shifting our focus to risk management. A key component of risk management is typically insurance (primarily life, health, and property/casualty). As important as insurance is, it is only a part of the risk management equation – you can also take actions to reduce your personal risk exposure.

Perhaps the most significant area where this comes into play is with cybersecurity and fraud prevention. We live in an ever-changing digital landscape where an ever-growing treasure-trove of valuable information is being stored and transmitted online. The unfortunate result of this is that hackers have a constantly growing incentive to try and capture this information and use it for their personal gain. It’s easy to feel overwhelmed hearing news of data breaches, hacks, and phishing, but if you focus on a few simple steps to improve your own personal cybersecurity, you can avoid being the “low-hanging fruit” for any malicious actors. A good analogy here is to car theft – most cases of car theft are the result of people leaving their keys in an unlocked car. For someone inclined to steal a car, that’s basically an invitation! Similarly, here are a few ways you can make yourself a more difficult target for potential hackers.

  • Use unique passwords. One of the most common ways that hackers take advantage of data breaches is by simply re-trying leaked username and password combinations on other sites. A data breach from Netflix may not sound dangerous at first glance, but if your Netflix password is the same as your bank account password, you could be in trouble. There are a number of tools available to help avoid password re-use, including password managers or a good old-fashioned notebook kept in a safe location at home.
  • Be careful with email. Email is convenient but can be compromised relatively easily. Any email communications asking for sensitive information such as passwords, bank account numbers, social security numbers, or any other private identifying information should be a red flag. Similarly, watch out for emails asking you to follow a sign-in link – these can lead to fake pages that only exist to steal login information from unsuspecting users. If you have any suspicion about an email, it’s best to assume it is malicious.
  • Pick up the phone. Most hacks today involve some element of phishing, where hackers pretend to be a reputable person or business in an attempt to gain your trust and access your information. The number one way around this is to simply make a phone call! Do not blindly trust an email that purports to be from your bank – instead, call your bank’s publicly listed phone number and talk to a representative about the email. If it is legitimate, they will be able to help you over the phone as well.

You can rest assured that we are taking every possible step to minimize the risk of fraud when it comes to our clients’ assets. Please do not hesitate to reach out if you have questions about your personal cybersecurity, planning, or anything else.


Waypoint Capital Advisors