Insights for June 2023
I hope you all enjoyed a wonderful Memorial Day weekend as we head into the warm days of summer. As we close up the month of May, my thoughts turn to a friend’s comment that according to the Jewish calendar, May, known as “Iyar,” is a month of transition. It's a time when things that have grown old and tired must bid adieu as new beginnings take root. It is obvious that financial markets are in dire need of rejuvenation. It would be so nice to give you nothing but sunny news as we approach the solstice, but we can’t fall for the head fake that some folks are engaged in when it comes to markets and the economy.
Don't get me wrong, we're optimists here at Lion's Eye Wealth, always on the lookout for bullish opportunities. But we also have to face reality. The truth is, market fundamentals have taken a nosedive over the past six months, and let's not forget about the looming debt ceiling issue. With negotiations in the works, it looks like politicians will once again do what they do best, potentially kicking the issue down the road until January 2025. I have my own thoughts about this which I have shared in the article I sent along two weeks ago, "Will We Ever Recognize the Flaws in our Financial Systems and End Financial Illusion"? If you haven’t read it, I hope you take the time to do so as it goes deeply into the underpinnings of economic and market turmoil that I feel isn’t wise to ignore. Frankly, I am quite tired of band-aid solutions that never solve the root cause and only lead to potentially more dire circumstances. Others have different opinions of course.
These are some leading themes as we launch into June 2023 (I do wish I had better news!)
1. Market fundamentals are worse than they were 6 months ago.
2. Valuations are not attractive.
3. Earnings estimates are too optimistic and may be off as much as 20%.
4. Some investors have become unrealistic about rate cuts for 2023.
5. Stress on banking continues along with the credit crunch which we’ll see escalate toward year’s end.
6. Increasing the debt ceiling will, among other things, down market liquidity and a rally.
I hope that by sharing valuable information with you, I can empower you and shed some light on the intricate world of finance and how it affects your personal portfolios. At the very least, having an understanding of where we stand now can help tap into your own inner wisdom when it comes to finance which only benefits all of your financial dealings and our work together with your portfolios tracked to your goals.
When I peruse the financial news these days, it's a circus out there. Everyone's throwing their two cents in about the Fed, interest rates, a soft landing, a recession, a bull market, the credit crunch—you name it! It's enough to make your head spin. What we really need is a calm, level-headed voice to guide us through the madness and tell us what the heck to do in this chaotic landscape. Investing based on wild assumptions is a recipe for disaster. We're in search of a smooth ride, not a rollercoaster of emotions.
While some folks are flocking to the S&P 500, which is starting to resemble a party where only the top ten mega cap stocks are invited, we at Lion's Eye Wealth are venturing beyond the beaten path. We're scouring different asset classes and market caps, exploring alternative investments, and keeping an eye on money markets to maintain stability and balance. We're not ones to put all our eggs in one basket. Diversification is the name of the game.
So, as the summer approaches and the days get warmer, we hope you enjoy the sunshine and take some time to relax. If you have any burning questions or need some financial guidance, don't hesitate to reach out to us. We're here to make your financial journey a little less bumpy and a lot more enjoyable. Cheers to a fabulous summer!
All the best,
Lisa Durant, President
