Market Update – May 2023

Join Chad Larson, Senior Portfolio Manager, as he gives his thoughts on the market for May 2023.

Welcome to the MLD Wealth “Money Matters” podcast, where we delve into the latest financial trends and strategies to help you make informed investment decisions. I’m Chad Larson, and today we have an insightful discussion lined up to navigate the complexities of the current market landscape. We’ll start by examining the recent January market surge, attributing it to the tax loss season rather than a sign of a market bottom. Understanding this nuance can help you better interpret market movements and set realistic expectations.

We’ll then shift our focus to the Federal Reserve’s policies. Despite signs of moderating inflation and slowing economic growth, the Fed may not pivot as quickly as some anticipate. This cautious approach will likely influence market behavior in the coming months. In conjunction, we’ll discuss the persistent strength in wage growth and how it continues to impact the Fed’s policy decisions despite inflation having peaked.

Another crucial aspect we’ll cover is the potential impact of rising unemployment on the Fed’s rate cut decisions. While historically, an increase in unemployment triggers rate cuts, the current low levels might alter this pattern, adding another layer of complexity to the economic outlook. We’ll also explore strategic portfolio positioning amid higher rates. With margin pressures and profit growth challenges, it’s essential to adapt your investment strategies to maintain resilience.

Investing in higher quality and growing cash flow assets will be emphasized as a prudent approach to uncertain market conditions. This strategy aims to balance risk and reward effectively. Additionally, we’ll discuss the opportunities presented by bear markets. Despite their challenges, these markets can offer strong returns if capital is deployed selectively and strategically.

As we navigate these topics, our goal is to provide you with actionable insights that enhance your investment decisions. Stay tuned for an engaging and informative episode that reinforces the importance of staying informed and proactive in today’s financial landscape.