What follows is our Q4 2023 Quarterly Newsletter. Want in on the action? Scroll to the very bottom of the page to sign up.

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We made it. 2024 is well underway. We’ll try to make sense of the strong equity market performance that closed out 2023 and the relative resilience of the economy. We’ve also got a new batch of common terms and definitions, as well as an invitation to the first of many upcoming Copia events.

We’re here for you,

The Copia Team

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Market Update

Major U.S. Stock Market Index Performance in Q4 of 2023: 

• S&P 500 +11.69%
• Nasdaq Composite +13.8%
• Russell 2000 -14.0%
• Dow Jones Industrial -13.1%

If you recall from our last newsletter, despite the challenging economic and market conditions we experienced in the third quarter, we discussed the potential for the equity markets to show resilience as the year ended. Indeed, a “Santa Claus rally” was what we witnessed! The fourth quarter’s equity returns pushed portfolios into solidly positive territory for the year.

Now, as we transition into 2024, the question arises: Are we past the economic risks we discussed last quarter? Have we entered a new “bull market”?

Let’s begin with the positive developments: the job market remains robust, with weekly jobless claims in mid-January hitting their lowest since September 2022, and the national unemployment rate is at pre-pandemic lows. Consumer confidence is at its highest since July 2021, up 21.4% from last year. The holiday sales season saw core retail sales surge to a record $964.4 billion, a 3.8% increase from 2022, surpassing all Wall Street expectations. These factors suggest a resilient U.S. economy.

However, concerning trends also merit attention, particularly regarding the American consumer. Credit card balances have risen for nine consecutive quarters, with total debt exceeding $1 trillion—an all-time high. Concurrently, credit card delinquency rates are climbing and have surpassed pre-pandemic levels. Moreover, the savings rate is now lower than before the pandemic. A Bankrate poll indicates that only 44 percent of U.S. adults could cover a $1,000 emergency expense from savings. These trends likely reflect the impact of inflation—as prices rise, spending increases—contributing to the economy’s resilience.

While there are numerous other economic indicators to consider, this mix suggests that 2024 may not be entirely smooth sailing. We anticipate headwinds in domestic markets and wouldn’t be surprised by mild to moderate corrections early in the year, particularly in sectors that performed well at the end of 2023. Add to this the heightened political activity of an election year, and we can expect volatile market performance in the first half. However, this volatility is not necessarily negative. As asset managers, we view market fluctuations as opportunities to build longer-term positions. While the timing of the next bull market is uncertain, we remain confident that market prices will be significantly higher in the next 3-5 years, and we aim to capitalize on this recovery for our clients.

Regarding investment opportunities, we are focusing on market segments with potential for long-term growth or those that have lagged behind broader indices. These include U.S. Small-Cap stocks, Emerging International Markets such as India and Latin America, and Precious Metals. We are also considering investments in specific sectors like Health Care, Biotechnology, Semiconductors, and Crypto/Blockchain Technology, particularly in more aggressive portfolios.

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Copia Events Calendar

Before the pandemic, we relished hosting client events. Our “60 Minutes With Copia” series, inspired by the iconic CBS program, was particularly popular, focusing on key topics and featuring local business leaders. The pandemic led us to pause these gatherings, but now, with our growth and a new space for group events, we’re eager to revive this tradition and enrich your experience as a Copia client.

We’re thrilled to announce multiple client events for 2024, kicking off with an Open House at our new office (details to follow). We’ll continue with “60 Minutes With Copia” and other engaging events throughout the year.

Your input is invaluable to us; we invite you to share the topics you find most interesting and important. Please take a moment to complete a brief survey to help us curate our events calendar to your preferences.

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