As summer comes to a close we enter the seasonally weak fall period for stocks. This coupled with Fed Chair Powell’s indication of additional monetary tightening we should expect higher rates, an eventual rise in unemployment, slower or negative job growth, GDP weakening and slowing corporate earnings.
Pressure on earnings will result in lower P/E multiples and therefore declining equity prices in the short run.
Given our commitment to being long-term investors we will use lower prices as an opportunity to add exposure to more high-quality large-cap US companies utilizing our barbell strategy of owning both value and growth companies.
Be well and please call or email with questions, comments or concerns.