By: Chad Meyer, CFA

For all of its joys, the holiday season also has a well-documented history as a source of stress. And while they couldn’t all have been hosting their in-laws for an extended visit, American investors certainly bore the brunt of that phenomenon this past December. As trees were lit and skis were waxed, market commentary ranged from stunned disbelief to gallows humor. Perhaps nowhere was the mood more accurately captured than in the Wall Street Journal’s Christmas Eve headline: “On the Bright Side, The Market Closes Early Today.” Bah humbug, indeed.

By the numbers, this pervasive pessimism was amply justified. The S&P 500 and Dow Jones Industrial Average turned in respective tumbles of nearly 18% and 9% last year. Both of these performances were punctuated by the worst bond market performance on record. Unable to lean upon the once-invincible “FAANG” gang, the Nasdaq followed a similar script, plunging a remarkable 33%. With a year’s worth of gains (and then some) melted away, the perches of past years suddenly felt like ancient history.

But on a brighter note, as this newsletter “goes to press,” American stocks have notched their third consecutive week of gains boosted by hopes that inflation might continue to slow and that the Fed and other global central banks may pause interest rate campaigns in the coming months. Nor is the good news merely local, with major indices in Europe, China and Japan all up at handily for the year. In other words, while the Grinch may have stolen Christmas, there’s reason to believe he didn’t make off with the next fiscal year as well.

Of course, those “macro” questions on investors’ minds 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 2023 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…and to a bit less stress in the coming months.

I close with some bittersweet news. Randy McMenamin, our firm’s co-founder, investment guru and wonderful friend, recently announced his well-earned retirement after 55 years in the investment business. Randy got his start at the Mercantile Safe-Deposit & Trust before co-founding Hardesty (now Tufton) Capital Management in 1995. Randy’s work as a talented value investor and trusted investment counsel has served his clients extremely well for over five decades. We’ve learned (and will continue to learn) so much from Randy and wish him and Carole all the best.