Hello from Sycamore,

Notice

Recently, some of you may have noticed a small deposit to your account(s). These happen periodically and are generated from class action suits filed against companies that you now hold or have held in the past. We automatically file for these on your behalf and when the money is distributed (which is usually several years after the action is filed), we then credit your account(s) with any amounts you are entitled to.

Performance and the Markets

Another year has passed and for investors, 2024 was a very good year. Inflation seems to be under control or at least much better than 2022-2023 and the Federal Reserve Bank has started lowering interest rates. This bodes well for 2025 and we’re looking forward to the coming year.

Except for a few giant tech stocks, known as the ‘Magnificent Seven’, the markets appear ‘fairly’ valued in our opinion. Earnings continue to grow for most companies in your portfolio(s) and it’s easy to find great companies at what we feel are selling for rational prices. Supporting all of this is the growth of our economy. The Atlanta Federal Reserve Bank is now expecting Q-4 growth of about 2.4% annualized growth, and this follows a good third quarter of about 3%.

Our average 100% stock account gained about 11% (gross of fees) for 2024. Considering the performance we had in 2023, we’re very pleased. We normally look for an average of about 9% to 10%, so 11% is a plus year. Remember that when investing, there are two considerations – Risk and Return. Since you have entrusted us with your investments, we look at Risk first. If the Risk is too great, we simply don’t jump in no matter how shiny the stone appears. This philosophy has helped us outperform the S&P 500 index over the past 25 years.

The Economy

I mentioned above that the underlying platform on which businesses rely is the growth of our economy. We think the Federal Reserve Bank has done a good job of managing our economy during the past two years while they have been combating inflation. About two years ago the Federal Reserve Bank initiated something we’ve not seen before when they were attacking inflation. Not only did they raise interest rates, but they also reduced our money supply, which had grown sharply during COVID-19. This plan seems to have had the desired effect. We’ve slowed the inflation rate without pushing the economy into a recession. Speaking of recession, does anyone remember how a recession was all but assured when the Federal Reserve Bank started raising interest rates in 2023? We don’t hear much about a pending recession anymore and we feel the Fed should receive credit for what – so far – seems to be a soft landing.

We seem to be getting inflation under control (currently about 2.5% vs almost 9% in 2022), Auto sales continue to increase, the dollar remains strong, retail sales continue to grow, and we’re creating jobs (about 200,000 per month according to the Bureau of Labor Statistics), and unemployment is holding at about 4%. Housing starts have been declining, but we’re hopeful that this will improve as interest rates decline. On balance, we’re optimistic about the economy and share prices.

Purchase and Sale Activity During Q-4

Purchases – Cirrus Logic, Centene, Dentsply Sirona, and Siemens LTD.
Sales – United Natural Foods.

Thanks for your business and trust!

Sincerely,
The Sycamore Financial Group Team

*Data not audited
**Results reported gross of fees
***Past performance does not assure future results.  Investors cannot invest directly in the stock market indexes such as the S&P 500.  Investment return and principal value of an investment will fluctuate.  Investor value, when sold may be worth more or less than their original cost.