Equity markets navigated a partial recovery from recent lows as the First Quarter closed in the red. The S&P 500 was down
4.6% as global concerns continue to cast an ominous shadow on capital markets. In addition to lingering reports on the status of
COVID-19 cases, we continue to be bombarded by record inflation reports and news on current & projected Federal Reserve
moves. After an approved rate increase of 0.25% last month, market driven rates on the 2-yr Treasury and the 10-yr Treasury
briefly formed an inverted yield curve, often associated with an anticipated recession. The last time we saw an inverted yield
curve was in 2019. At the time, we did not believe a recession was imminent which was supported by continued economic
growth. A recession did eventually occur, but it was driven by the global COVID-19 shutdown protocols and not the yield curve’s
ability to predict a pandemic.

Another factor driving capital markets has been the Russia-Ukraine war. As heartbreaking news and images continue to emerge
from Ukraine, we must remain focused on sanction details and their economic impact. As a point of reference, Russia’s GDP is
smaller than the GDP of New York. It is Europe’s dependence on Russian energy exports that is causing short-term challenges
in fulfilling a complete isolation of Russia from the global economic network. This connection cannot be severed overnight, but
plans have been initiated to eventually remove Europe’s dependence on Russia by 2024.

We believe that battling inflation is a priority and success cannot be realized without the U.S. consumer feeling some
discomfort/pain. Spending habits must change, either through substitution or spending reduction, to avoid enabling higher
prices. We welcome higher interest rates which should provide a catalyst for a change in spending patterns, but assistance is
needed from other areas including management of labor costs, resolution of supply chain issues and economic corporate

It appears that daily headlines on inflation, interest rates, the Russia-Ukraine war and sanctions have provided the basis for
equity markets to remain in a trading range that is consistent within our Dow Jones Industrial Average target range between
33,500 and 35,500. Until further clarification occurs on the economic horizon, we believe a breakout in either direction is doubtful
and should it occur, may be short-lived. We believe near-term volatility and risks present opportunities for the long-term and will
continue to make portfolio decisions with this perspective. Patience and fundamentals will serve as the basis for our motto,
“Seeking Opportunities in a New World.”

We truly appreciate all the support from our clients over the past 10 years. Your patience & confidence in us have been
remarkable as we moved through challenging times that include the tech bubble, the financial crisis and a pandemic. As we
celebrate our 10-year anniversary, we are excited to announce the appointment of both Antoinette (Toni) Sun and Jonathan
Smith to their roles as Co-Chairpersons of the Board of Trustees & Officers. We are also excited to announce that Kelly Carreno
will now oversee all firm level administrative and (non-portfolio) operations as the newly appointed Office Manager. Please
continue to reach out to your adviser should you have any questions concerning your portfolio or financial plan during these
ongoing unprecedented times.

Share This