Fourth Quarter, 2022

High Five 2022

Amidst the investment challenges of 2022, the worst year for U.S. stocks since 2008, and for U.S. bonds* the worst since the late 1970s, let’s give ourselves a HIGH FIVE for the 5 best things we did this year.

• Took advantage of highs before the downturn – For balanced clients with equity, fixed income, and cash, we sold excess equity allocations when markets were up in 2021 and early 2022, and rebalanced to fixed income and cash, according to stated investment objectives.

• Took advantage of the lows – We made tax trades during the downturn by selling equity and fixed-income positions with tax losses and reinvesting proceeds into similar positions to reduce client tax burdens in 2022, and carried forward any unused losses to shelter gains in the future.

• Equity diversification paid off – Morningstar’s U.S. value stock index was only down 8% versus their U.S. growth stock index, down more than 30%.

• Fixed income diversification paid off – W&A fixed income portfolio of 5 mutual funds includes 1 of only 2 bond funds that actively manage over $1 billion that had positive performance in calendar year 2022.

• Took advantage of higher interest rates – When possible, excess cash was held in Schwab money market funds with current yields as high as 4.27%.

Good news ahead? Bond yields are at their highest in more than a decade; savers are finally getting interest; and yes, investors can still buy stocks & bonds on sale now, which can lead to better returns in the future.

Remember the Rolling Stones song – You can’t always get what you want…but if you try sometimes, you just might find you get what you need.

– Phyllis

Sources include: Wall St Journal; Axios Markets; morningstar.com; famag.com; schwabinstitutional.com; google.com.

*As measured by the Bloomberg U.S. Aggregate

Author: Senior Vice President Senior Wealth StrategistPhyllis had been associated with W&A for a number of years before joining the firm, acting as a consultant to the company in its formative stage and subsequently as a client. Prior to joining W&A, Phyllis served as Vice President, Corporate Finance at Morgan Keegan & Company, Inc. She was involved in all aspects of its investment banking activities, including mergers and acquisitions, valuation studies, and initial public offerings. She earned registrations in NASD Series 7 (Registered Representative) and Series 63 (Blue Sky). Phyllis holds an MBA in Finance as well as M.Ed and BBA degrees from the University of Memphis. She is a Chartered Financial AnalystTM(CFA®) and a Certified Financial PlannerTM(CFP®) Licensee. She is past-Chairman and past-President of the Mid-South Society of the Financial Planning Association (FPA) and served on their Board of Directors from 1995 to 2000. During her term as President in 1998, the Mid- South Society of FPA was chosen the Outstanding Society of the Year by the national FPA organization. Her community volunteer activities include MIFA and the Women’s Foundation for a Greater Memphis, where she served as Treasurer, Chair of the Finance Committee and currently chairs the Investment Committee. She also serves on the Board of Governors of The Seaside Institute in Seaside, FL.

Github