Wishing All a Healthy and Prosperous New Year!

As we enter 2024, many investment professionals have issued forecasts for what will happen in 2024. Frankly, we pay little attention to them. At PWM, we remain focused on maintaining and improving our core, diversified portfolio for our clients, adhering to our well-researched, long-term asset allocation, and supplementing the PWM core portfolio with alternative investments to help better tailor the return and risk targets for all our investors.

The How and Why of the PWM Weekly Commentary

Each week in these pages we attempt to condense and analyze the latest news on Wall Street and the economy through our eyes. We are free to state our thoughts and predictions on ‘what comes next’ and sometimes we agree with the mainstream, and other times we do not. It would be nice to be right every time, but like every economic forecaster, a flip of the coin may be just as accurate.

So why do we bother completing this exercise every week?

The short answer is that it helps us remain keenly aware of what is happening in the world. Taking in opinions from all corners of the world helps us identify broader trends and opportunities. If we took a trip to Mars for several years, upon our return, it would be exceedingly difficult to make sense of the news without the perspective of the intervening years. Portfolio risk is not static. It ebbs and flows from one asset class to another. Monitoring markets helps us to see more clearly when risks become outsized, which prompts us to adjust the portfolio to address those risks.

A Case in Point: The Bond Market During the Pandemic

As the pandemic developed, interest rates hit record lows, bonds were left with extraordinarily little positive return potential (unless rates were allowed to go negative, which we believed was unlikely). On the other hand, a return to normalized interest rates would have an extremely negative impact on the return of our bond portfolio. The risk in a generally low risk bond had been heightened. Our response was to reduce our risk to interest rate increases by adjusting our fixed income holdings to reduce duration (duration is a way to measure interest rate risk) and achieve a better risk balance in our portfolios.

As interest rates have risen, and the risk/return tradeoff has become more balanced, and we have re-adjusted our portfolios to a higher duration to reflect the changed risk profile.

Help Us Improve in 2024

We hope you find the topics and information in our Weekly Commentary interesting and informative. Whether you agree or disagree, or if you would like a certain topic discussed, we welcome your comments. Just email Phil or any member of the PWM team. We are always looking to improve our commentary for you. We encourage you to be part of the process in 2024 and we look forward to hearing from you!

Happy New Year to all!


What We’re Reading

What Did Wall Street Get Right About Markets This Year? Not Much

The Growth of New Car Prices in the U.S.

Interactive Map: U.S. Property Taxes by State

From FedEx to airlines, companies are starting to lose their pricing power


Palumbo Wealth Management (PWM) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where PWM and its representatives are properly licensed or exempt from licensure. For additional information, please visit our website at www.palumbowm.com.

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.

The views expressed in this commentary are subject to change based on market and other conditions. These documents may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.

All information has been obtained from sources believed to be reliable, but its accuracy is not guaranteed. There is no representation or warranty as to the current accuracy, reliability or completeness of, nor liability for, decisions based on such information and it should not be relied on as such.

General News

By: Adam