4/17/2024 Phoenix, AZ—Trajan Wealth’s Chief Investment Officer, Udayan Mitra, CFA, weighs in on March’s financial market. His insights are condensed below.

March 2024 Market Review

- YTD returns on domestic equities range from 6.92% in small and mid-cap stocks to 10.55% in the S&P 500. Bond returns have started to recover with dovish language emanating from the US Federal Reserve Bank on the future direction of monetary policy.
- Fed Chairman Powell has indicated that the FOMC may be open to reducing the Fed Funds rate before inflation reaches the 2% target.
- The Fed has room to reduce the overnight rate—the market anticipates rate cuts of between 0.50% and 0.75% by the end of the year. However, we believe longer-term rates, based on US Treasury bond yields, will remain under pressure throughout the next cycle.
- It’s prudent to assume that while short-term rates respond to the Fed rate cuts, longer-term yields may remain range-bound around current levels and may even trend higher if inflation remains sticky over the FOMC’s 2% target or the US Treasury keeps issuing bonds to finance the Federal government’s persistent budget deficits.

Trajan Wealth Insights & Recommendations:

- Rapidly growing Federal Government debt means we’re cautious about intermediate and long-term interest rates—we believe the days of sub 2% yields on %- year and 10-year notes are firmly behind us.
- We advocate an elevated level of diversification across asset classes and develop specific asset allocation perimeters that cater to individual risk-tolerance thresholds. Given higher intermediate and long-term bond yields and the prospect of slower economic growth, high-quality but moderate-duration fixed-income assets should command a higher weighting in most portfolios.
- With interest rates projected to be higher in the next cycle, there’s a large possibility of “repricing” in certain interest rate-sensitive sectors. High-quality income-producing assets may be available at dislocated prices, offering attractive entry opportunities. We’re actively seeking out these opportunities as they help reduce the duration of client portfolios through higher cash flow while dampening overall volatility.
- Regarding public equity, we maintain a bias toward companies with low debt and stable sources of revenues. A portfolio review can ensure asset allocation and alignment with financial goals.

About Trajan Wealth
Trajan Wealth, LLC was founded in 2012 by CEO Jeff Junior. Before his 20+ years in the financial services profession, Jeff served in the United States Marine Corps. He continues to serve his clients and employees with the utmost service, respect, and attention to detail.

By using low-cost, diversified portfolios under its fiduciary standard and working closely with its investment advisors and estate attorneys within one office, the company provides long-term support for client's retirement needs and estate plans, including wealth accumulation and tax planning strategies. The firm has multiple locations in Arizona, Colorado, Florida, Georgia, Texas, and Utah.

For more information or to schedule a complimentary consultation, visit https://trajanwealth.com or call 1-800-838-3079.

Disclaimer:
* Advisory services offered through Trajan® Wealth L.L.C., an SEC registered investment advisor. Legal services are offered through ​Trajan® Estate, L.L.C. ​in Arizona and Utah, and independent law firms in other states.