In 2023, our cautious approach protected client value amidst global market shifts, leading to stability compared to major indices over two years, with our portfolio remaining diversified yet neutral in 2024, prioritizing strong companies and introducing an income-oriented strategy for a balanced approach in a higher yield environment.
At a glance
- Market movements in 2023 were influenced by banking sector upheavals, AI breakthroughs, Fed interest rate hikes, geopolitical shifts (such as the Israel-Hamas conflict), and deliberate OPEC production cuts. These underscored the complexity of the global economy, requiring adaptable strategies.
- In the US, despite concerns of a recession due to high inflation and aggressive Fed policy tightening in 2022, stocks rallied in 2023. Strong corporate earnings and easing inflation contributed to a 24.2% return for the year, though the equal-weighted index returned 11.56%.
- In Canada, the equity market showed resilience in 2023, ending with a strong 8.1% return for the year, led by information technology (+56%) and health care (+22%) sectors.
- In Q4 2023, despite a calm U.S. Treasury market, government debt surged to nearly $34 trillion by year-end. Fiscal challenges persist, with forecasts indicating a 23% increase in Treasury auction sizes for 2024.
- The regional banking crisis prompted shifts in lending practices and strategies, leading to wider loan spreads. Oaktree Strategic Credit Fund, led by Howard Marks, offers alternative investment options.
- Cyber risks have heightened due to expanded digital connectivity, cloud adoption, and hybrid operations. Over 80% of critical infrastructure organizations experienced ransomware attacks in the past year. Palo Alto Networks Inc. offers an advanced next-generation firewall integrating application, user, and content monitoring capabilities.
- Tall Oak Capital Advisors is introducing the Tall Oak Diversified Income Pool: This strategy aims to enhance portfolios for retirement-focused investors, as well as for investors with risk profiles that are conservative to moderate.
- In the future, our focus will remain on identifying long-term investment themes that align with the prevailing market conditions. Additionally, we will emphasize dividend growth stocks in the new pool, as they offer stability and serve as a hedge against market volatility, with the potential for increasing dividend income over time.
- Dividend growth investing is a long-term strategy that prioritizes sustained growth by reinvesting dividends, emphasizing companies with consistent dividend increases over time.
The views expressed in this commentary are those of Tall Oak Capital Advisors as at the date of publication and are subject to change without notice. This commentary is presented only as a general source of information and is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax or legal advice. Statistics, factual data and other information are from sources Tall Oak believes to be reliable but their accuracy cannot be guaranteed. This commentary is intended for distribution only in those jurisdictions where Tall Oak Capital Advisors are registered. Securities-related products and services are offered through Raymond James Correspondent Services Ltd., member Canadian Investor Protection Fund. Insurance products and services are offered through Gryphin Advantage Inc., which is not a member-Canadian Investor Protection Fund. This commentary may provide links to other Internet sites for the convenience of users. Tall Oak Capital Advisors is not responsible for the availability or content of these external sites, nor does Tall Oak Capital Advisors endorse, warrant or guarantee the products, services or information described or offered at these other Internet sites. Users cannot assume that the external sites will abide by the same Privacy Policy which Tall Oak Capital Advisors adheres to.
