By: Chad Meyer, CFA

“May you live in interesting times.” Purportedly Chinese in origin, this cryptic maxim has been alternately interpreted as both a blessing and a curse. In that regard, it should strike a familiar note with American investors. As this note “goes to press,” the country’s major news outlets are allocating equal front-page real estate to interest rate predictions (when will the Fed “ease up”), to campaign efforts for a probable Biden vs. Trump rematch and to a foreign policy landscape with uncertainty and sadness spanning from the Middle East to Ukraine. Blessing or curse, there is no denying that these are “interesting times.”

So, what do we make of it all? First, and most concretely, let’s talk about the numbers. In sharp contrast to 2022, last year ended on a high note, with the S&P 500, Dow Jones and Nasdaq notching fourth-quarter gains of 12%, 13%, and 14%, respectively. And while the technology sector and its Artificial Intelligence (AI) fever was the main event of 2023’s first three quarters, the year closed with the value stock, and overall market breadth, emphatically more en vogue. From financials to cyclicals, the data strongly indicates that a newfound conservatism may be gripping the marketplace.

As we look at the new year’s outset, is Mr. Market making a compelling case for continued strength? And will the Magnificent Seven continue to pass some of the heavy lifting off to the other 493 S&P constituents? As we begin 2024, American stocks have been mixed, with a growing economy (albeit a slower one) and a Fed on the cusp of relaxing its interest rate policy providing a strong counterbalance to any early-January jitters. In other words, while the Grinch didn’t steal Christmas, there’s also reason to believe that he won’t make off with the next fiscal year as well.

Of course, those aforementioned economic and Fed-related questions will continue to loom. And neither I nor anything you’ll find in the pages ahead will presume to answer them. (Yet again, Santa forgot to bring my crystal ball.) Instead, as we set out into 2024 together, I’ll simply reiterate a principle that has guided this firm and its clients since 1995. A good business, bought at a fair price, is among the most powerful—and reliable—wealth-creation vehicles in the world. From all of us here at Tufton Capital, we thank you for the trust you have placed in us and look forward to the tireless pursuit of your interests in this and many more years to come.

Here’s to a Happy New Year for you and yours.