Riverfront July 16, 2024
Downloads: Riverfront-Jul-16-2024.pdf

July 2024 Chart Pack Summary

Written by RiverFront Investment Group.  Reprinted with permission from RiverFront Investment Group.  Redistribution is prohibited.

Happy Independence Day… July 1, 2024
Downloads: Happy-Independence-Day.pdf

The American Creed

In 1881, a young boy named William Tyler Page left home, bound for Washington, D.C.  Page knew little about politics, having spent most of his young life working twelve hours a day in a paper-bag factory.  But he had just been accepted as a courier in the House of Representatives.

He was only thirteen years old.

For Page, this was no mere summertime job.  It was not intended to be a mark on his future resume.  It was the beginning of 61 years of unheralded public service.

As a teenager, Page spent his days delivering messages, running errands, and keeping the House organized.  Couriers like him were expected to work hard, be reliable, and always conduct themselves in a non-partisan manner.  Page must have enjoyed the work because he never left Washington.  Instead, he rose through the ranks, supervising the younger couriers as he got older.  He became such a trusted fixture in the Capitol that both parties turned to him for advice on congressional procedure.

Having participated firsthand in every aspect of lawmaking, Page knew all there was to know about how to actually get work done.  Congress knew it, too.  In 1919, he was elected Clerk of the House of Representatives.  It was his responsibility to preserve order and decorum on the House floor at all times, keep official records, and oversee the election of the Speaker.  Page served as Clerk throughout the 1920s, when the Republican Party was in the majority.  When the Democrats took over in 1931, a special position of Emeritus Clerk was created specifically for him, showing just how respected he was on both sides of the aisle.  His dedication, expertise, and non-partisanship became a byword in the Capitol building.  And when he passed away in 1942, both parties agreed to adjourn in his honor.

But Page was most known for being the author of the American Creed.

In 1917, shortly after the U.S. entered World War I, the nation was gripped by patriotic fervor.  Inspired by what he was seeing, Page began thinking about his own patriotism and what the country meant to him.

As someone who spent nearly every day of his life seeing “how the sausage gets made,” one might expect Page to have had a cynical view of our nation.  After all, many Americans often feel this way.  The headlines always seem to be full of mudslinging, scandals, and petty politics.  As children, we learn in school about the heroic deeds, monumental speeches, and pivotal moments that make up our country’s history.  But as adults, the magic of patriotism can get lost under an onslaught of negativity.

In life, though, it’s the things we labor for the most that we tend to love the most.  And William Page loved his country.

So, Page decided to write his thoughts and feelings down.  What inspired him.  What drove him.  What made his country special.  What made his country worth serving.  His goal was to craft a simple but thorough statement of what it means to be an American…and why being an American has meaning.

It went like this:

I believe in the United States of America as a government of the people, by the people, for the people; whose just powers are derived from the consent of the governed; a democracy in a republic; a sovereign Nation of many sovereign States; a perfect union, one and inseparable; established upon those principles of freedom, equality, justice, and humanity for which American patriots sacrificed their lives and fortunes.

I therefore believe it is my duty to my country to love it, to support its Constitution, to obey its laws, to respect its flag, and to defend it against all enemies. 

After writing these words, Page submitted them to a nationwide patriotic contest.  Immediately, his statement caught on.  Anyone who reads it can recognize the words.  They are the words of the Declaration of Independence.  Of the Preamble to the Constitution.  Of Daniel Webster’s legendary “Liberty and Union” speech.  Of Lincoln’s Gettysburg Address.  They are an amalgamation of every argument for democracy.  A summation of this crazy, grand experiment.  They are the philosophical pillars on which our country rests.

Page’s words won the contest.  They were recited by schoolchildren and added to many naturalization ceremonies.  And in 1918, they were passed by the House of Representatives – the same body Page had devoted his life to – as the American Creed. 

These days, it’s easy to have a cynical view of our country.  Easy to feel like this experiment in democracy has become an exercise in frustration.  But nobody said this experiment was going to be easy.  Only that it would be worth it.

Because the words in the American Creed are still true today.

In just a few days, we will celebrate our nation’s birthday.  As we do, we hope we can all personally reflect on the American Creed and what it means.  Our nation is still a government of the people, by the people, and for the people.  Our union may not always be perfect, but it will always be inseparable.  And it is still based on the principles of freedom, equality, justice, and humanity.  Principles that do not dull with the passage of time, but like stars in the sky, become ever brighter as they age.

We will also reflect on the achievements of our ancestors and the opportunities of our descendants.  We will ponder our own respective loves and beliefs.  May we also recommit — each and every one of us — to love, support, and defend our country.  May we reaffirm the words of the American Creed.

Happy Independence Day!


Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

Riverfront June 25, 2024
Downloads: Riverfront-Jun-25-2024.pdf

Three Rules Remain Neutral

Written by RiverFront Investment Group.  Reprinted with permission from RiverFront Investment Group.  Redistribution is prohibited.

Turn Down the Noise June 24, 2024
Downloads: Turn-Down-the-Noise.pdf

The noise can be deafening.  It seems to come from everywhere, all the time.  It can cause headaches, frustration, even anxiety.  Sometimes, you wish you could turn it off altogether.

No, we’re not referring to whatever music the kids are listening to these days.  We’re referring to the noise surrounding the upcoming presidential elections.

Election season is one of the most important aspects of our political system, but there’s no doubt that getting through it can be stressful.  All of us, at some point, will wonder things like, “What if my preferred candidate doesn’t win?”  “Who is my preferred candidate, anyway?”  “Does so-and-so really mean this?”  “Did so-and-so really say that?”  “What’s fact and what’s fiction?”

But one thing you shouldn’t have to stress over is how the elections will impact the markets.  There are a lot of misconceptions that spring up every four years about what presidential contests might mean for your portfolio.  Most of these cause investors to worry unnecessarily.  As your financial advisor, it’s our job to help you feel confident in your financial future, not anxious.  So, in this letter, let’s do a brief dive into three misconceptions about election season and the markets.

The first misconception is that presidential elections lead to down years in the markets.  It’s understandable why we might feel this way.  When we look back at past elections, the first things we remember are probably the controversies, uncertainties, and negativity.  Election years feel volatile in our minds and memories, usually because there’s so much drama and so much at stake.

But statistics prove this misconception is a myth.  Since 1944, there have been twenty presidential elections.  In sixteen of those, the S&P 500 experienced a positive return for the year.1  In fact, the median return for presidential election years is 10.7%.1  Of the four election years that saw a negative return, two did occur in this century – in 2000 and 2008 – but on both occasions, the nation was either entering or in the midst of a significant recession.

Now, we do sometimes see increased volatility in the months leading up to an election.  If we just look at how the S&P 500 performed from January through October in a presidential election year, the median return drops to 5.6%.1  That’s not bad, but it is nearly 50% lower.  This suggests the uncertainty over who will triumph in the election – and the debate over what each candidate’s policies will mean for the economy – does tend to have at least some effect.  Then, as the victor is announced and the picture becomes a little clearer, volatility tends to subside, and investors move on to other things.  So, in that sense, election season does matter, but nowhere near what the media may have you believe.  Elections are just one of the many ingredients in the gigantic stew that is the stock market…and they’re far from the most important.

The second misconception is that if one candidate wins, the markets will plummet.  This narrative is, frankly, driven by pure partisanship.  The fact of the matter is that the markets have soared under both Republican and Democratic presidents.  Naturally, they’ve occasionally soured under both parties, too.  Since 1944, the median return for the S&P 500 in the year after a presidential election is 9.8%.1  Since 1984?  The median return rises to over 24%. 

The reason for this is because of that gigantic stew we mentioned.  You see, the markets are driven by the economy more than by elections.   By the ebb and flow of trade, the law of supply and demand, by innovation and invention, by international conflict and consumer confidence.  And while the president does have an influence on all this, it’s just one of many, many influences.  As a result, the markets are far more likely to be affected by inflation and whether the Federal Reserve will cut interest rates than by the election.

When you think about it, the markets are like life.  The course our lives take isn’t determined by one gigantic decision, but by the millions of small decisions we make every day.  The same is true for the markets.  We don’t know about you, but we find this comforting.

The third misconception is that we have no control over any of this, and thus, no control over what happens to our portfolio.

It’s true. We can’t dictate who the president will be.  We can’t determine how the markets will react.  But what we can control is what we will do.  And that, is a mighty power indeed.

There’s a reason we began this letter by referencing noise.  As investors, one of the keys to long-term success is filtering out the noise and focusing on what really matters.  You see, the goal of all political campaigns – and the media that covers them – is to create noise.  That’s because noise provokes emotions.  Fear.  Anxiety.  Anger.  A greater emotional response leads to more clicks, more views, more shares, more engagement…and, yes, more money.  It’s understandable why campaigns and the media want these things.  But what we must guard against is letting those emotions drive our financial decisions.  Emotions promote the urge to do something – buy, sell, get in, get out, take on more risk, less risk, you name it.  They prompt us to make short-term decisions to alleviate what is, when you think about it, a short-term concern.

A presidential term lasts four years.  But the goals you have saved for, and the time horizon you have planned for, lasts much longer than that.  That’s why our investment strategy is built around the long-term.  It’s designed to help you not just tomorrow, or next month, but years and years from now.  It’s designed so that the president of the United States, as important as he or she may be, is only a passing mile-marker on the much longer road to your goals and dreams.

So, as we draw near to another election, remember: Tune out the noise.  Remember these misconceptions and avoid them.  And most of all, remember that our team is here to answer your questions and help you however we can.  Please let us know if there is ever anything we can do.

Have a great summer!


Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

1 “Election year market patterns,” ETRADE,

Dads on Duty June 12, 2024
Downloads: Dads-on-Duty.pdf

With fathers being honored this month, it got me thinking about this question:

How many dads have I had?

I am lucky enough to say that I have had more than one father. I have a wonderful relationship with my dad. But I also have shared important moments with men who temporarily filled a fatherly role when, for whatever reason, mine could not. These men were there when I needed them. They helped shape who I am today.

Not everyone can say they’ve had a father who was present in their lives. And others may say the father they did have was not worthy of the title. But I think it’s important to recognize those who willingly served as father figures when they were needed most.  The times in my life that role has been held by a teacher, a coach, a neighbor, a friend’s dad…you know those types.  We can recognize them across the course of our lives by how we have looked to them for guidance, wisdom, support, and protection.

Recently, I read a story about such father figures that really resonated with me.  In celebration of Father’s Day, I hope this story inspires you to reflect on how powerful an effect the presence a father figure can have.


Within the first three weeks of the school year at Southwood High School in Louisiana, 23 students were arrested, expelled, or suspended due to fighting. As a result, a heavy police presence began to take root at the school, which only served to make the students feel less safe.  So, the principal held an emergency meeting with parents to discuss solutions on what could be done.

The group bounced ideas off each other for a few hours without success.  How could they ensure their kids’ safety while at the same time making the school a relaxed and enjoyable place to be?

Then, one father had an idea: Who better to solve this problem than us?

Five fathers volunteered to be a rotating presence. They called themselves “Dads on Duty.” Dads started by going to the school in a group to monitor the hallways.  It expanded when they started talking to the students and making sure they got to class on time. They even shared a few (terrible) dad jokes.

Students didn’t welcome them with open arms right away, but they warmed up to them. But then the “Dads” went above that call of duty, by investing in the students’ success. They actively engaged in discussions with the students on entrepreneurship and alternatives to gang culture. They inspired these kids by focusing on their goals and helping out with home life.  Even with those who were not their own flesh and blood.

This group of five eventually became 40. All volunteer their time to cover daily shifts. As one of these founding fathers explained, “Because there are some folks who don’t have a father or don’t have such a great relationship with their father, and it’s our goal to let them see what the right relationship with a male figure is supposed to look like”1

Just having these dads on campus made a huge difference with both the students and faculty.  The fighting and misbehavior declined – and student morale rose. More and more, the students, teachers, and parents bonded with and supported each other.

Fights have been almost nonexistent since these dads went ‘on duty’. It has created such a huge impact in the community that the mayor wants to implement the program city-wide. And the “Dads on Duty” want to expand across schools all over Louisiana and then go nationwide.


What a difference a dad makes. While my own father holds a significant place in my heart, I know that other men I’ve encountered have also shaped my journey through their influence.

I think the lesson for all of us is, it doesn’t take a lot of effort to make a difference in someone’s life. In this case, it was just a few people who consistently gave time, a lot of love, and (maybe) some well-placed dad jokes.

And while I will be spending time this Father’s Day honoring my own dad, I will also be spending some of that time acknowledging those men who were “Dads on Duty” during a critical moment in my life – and who played a role in shaping the person I am today.

I hope that you will do the same.

On behalf of everyone on my team, I wish you a happy Father’s Day!


Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

1 “Fights erupted at a high school in Louisiana. So these dads took matters in their own hands,” CNN,

Riverfront June 11, 2024
Downloads: Riverfront-Jun-11-2024.pdf

No Bubble  Yet

Written by RiverFront Investment Group.  Reprinted with permission from RiverFront Investment Group.  Redistribution is prohibited.

Riverfront June 4, 2024
Downloads: Riverfront-Jun-4-2024.pdf

Mid-Year Market Check-Up: A Clean Bill of Health

Written by RiverFront Investment Group.  Reprinted with permission from RiverFront Investment Group.  Redistribution is prohibited.

Riverfront May 29, 2024
Downloads: Riverfront-May-29-2024.pdf

Japan: A Stealth Bull Obscured by a Weak Economy and Currency

Written by RiverFront Investment Group.  Reprinted with permission from RiverFront Investment Group.  Redistribution is prohibited.

Three Flags Over Normandy May 22, 2024
Downloads: Three-Flags-Over-Normandy.pdf

They came down in the dark.

It was just after midnight when the villagers of Sainte-Mere-Eglise awoke to the sound of planes, gunfire, explosions…and the sight of American paratroopers landing in their gardens.  Despite the hour, despite how groggy they were, they knew in an instant what was happening.  It was June 6, 1944.  D-Day.  The long-promised invasion of France had begun.

But the men of the 82nd and 101st Airborne divisions had no idea what was going on.  They came down in the dark, scarcely able to see.  They came down scattered and isolated.  They came down without equipment or supplies except what they could carry on their backs.  They came down without communication equipment except for their own voices, which they could hardly use for fear of alerting snipers.  They came down without many of their comrades, whose planes had crashed or been driven miles off course.  They came down without any certainty of where they were or where to go.

But they came down.  And the one thing they did come down with was courage.

Quickly, little knots of soldiers, often from different units, banded together.  Ducking snipers’ bullets, they felt their way through the countryside, blocking roads, cutting telephone wires, and seizing bridges as fast as they could before the main German forces realized what was happening.  But then, when they entered the town square of Sainte-Mere-Eglise, they stopped short.  There, in the trees, hung the bodies of their comrades, parachutes tangled in the branches.  Shot before they could even reach the ground.

For several minutes, all the stunned soldiers could do was stand there.  Staring – as one veteran later put it – “filled with a terrible anger.”

Then, an officer came forward.  Slowly, Colonel Edward Krause pulled from his pocket a faded, threadbare American flag.  A flag that had already seen action on the island of Sicily and been raised triumphantly over the city of Naples.  Earlier, Krause had promised his men that, “before dawn of D-Day, this flag will fly over Sainte-Mere-Eglise.”1  The paratroopers followed as he walked to the town hall, went to the flagpole, and raised the Star-Spangled Banner over the first town to be liberated in France.

They came down scattered and isolated.  They came down with little equipment or supplies.  They came down in the dark.  But they came down.  And all through the day and into the next, as they fought to hold the village, the little American flag flying over Sainte-Mere-Eglise never did.

Off the coast of Normandy, the crew of the U.S.S. Corry knew they were a target.  The plane that was supposed to lay a smoke screen for them had been shot down.  Nevertheless, they knew they had to get as

close to the beach as possible.  As the lead destroyer for the entire invasion, their job was to destroy as much of the German fortifications as they could so that the infantry could land on Utah Beach.

The crew of the Corry knew they were a target.  Still, their commander, George Hoffmann, sailed to within 1,000 yards of the beach and dropped anchor.  Soon, the sailors had destroyed one German battery, but another seemed especially intent on sinking them.  Realizing they could no longer press their luck, Hoffmann gave the order to move back.  But the water was so shallow, it wasn’t safe to simply turn around.  For the next several minutes, the sailors exerted every muscle and called upon every ounce of experience they had to keep the ship moving forward, then back, left, then right, stopping and starting…all while the ship’s guns fired so hot, deckhands had to keep hosing them down.  Finally, the Corry managed to turn…but then their luck ran out.

The explosion was so huge, Hoffmann thought “the ship had been lifted by an earthquake.”1  The Corry had been hit.  Hard.  Water poured into the hull.  A foot-wide crack ran across the main deck, leaving both ends of the ship pointed upwards.  The Corry was turning into a sinking steel coffin.  But through it all, the Corry’s guns kept firing…until Hoffmann gave the order: Abandon ship.

Still, still, the crew of the U.S.S. Corry knew they were a target.  As the sailors raced to board rafts and lifeboats, the German artillery kept firing.  As the senior officer, Hoffmann waited until everyone was off the ship, then dived into the water and swam toward a raft.  Explosions continued to roil the sea as the Corry slipped beneath the waves, leaving only the masts and part of the stern still visible.

But Hoffmann was not the last to leave.  Stunned, he and the survivors saw an unknown man climb the Corry’s stern.  The sailor removed the ship’s flag, which had been shot down, then swam to the main mast.  He knew he was a target.  Shells were falling all around him.  The crew watched in awe as, despite this, the sailor “calmly tied on the flag and ran it up the mast” before swimming away.

No one knows who the sailor was or what happened to him.  But we know what happened to flag.  The mast continued to jut above the water.  For a few seconds, the flag hung there.  Then it stretched out.  The Stars and Stripes rippled in the breeze.  Refusing to succumb to the sea.


Next month marks the 80th anniversary of the D-Day landings.  As we prepare to observe Memorial Day, we think it’s right that we remember a third flag flown over the beaches of Normandy.

Every morning, at the American Cemetery in Normandy, the American flag rises over the graves of those who fell on D-Day.  They gave their lives to plant the flag.  To defend the flag.  And most of all, to ensure that what the flag stands for – freedom, liberty, justice, equality – would never be extinguished from the earth.  We are so grateful for them.  We know you are, too.  So, this Memorial Day, let us all do our best to remember the words inscribed near that flag:

We have not forgotten, we will never forget, the debt of infinite gratitude that we have contracted with those who gave everything for our freedom.

On behalf of our entire team, we wish you a safe and peaceful Memorial Day.


Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

1 Cornelius Ryan, The Longest Day: June 6, 1944.  New York, Simon and Schuster, 1959.

Riverfront May 21, 2024
Downloads: Riverfront-May-21-2024.pdf

Q1 Earnings Recap: US Large Caps Climb the “Wall of Worry”

Written by RiverFront Investment Group.  Reprinted with permission from RiverFront Investment Group.  Redistribution is prohibited.

Happy Mother’s Day… May 8, 2024
Downloads: Happy-Mothers-Day.pdf

A mother’s work is never done, never easy, and never celebrated enough. It’s not uncommon to hear people describe their mom as “The Best Mom Ever” and proudly present her with a personalized coffee cup or trophy. But for many people, Mother’s Day can be a difficult day, filled with emotion, struggle, and maybe even heartbreak. For that reason, this year we want to try to honor all the ways this complicated day affects people.

For some, this is your first Mother’s Day without your mom. We’ve heard so many stories of loss this past year and our hearts are with you as you find new traditions to continue celebrating the woman who gave you life. Whether you plant flowers in her honor, enjoy brunch at her favorite restaurant, or spend an afternoon on her favorite lake, we know she is in your thoughts on this day more than others.

For the moms of little ones who are wondering if the real gift might be some quiet time alone, we see you. We know you’re exhausted and have run out of ideas about what to cook for dinner. Know that you inspire us. This year, we send you all our restorative energy wishes and have our fingers crossed you get the nap you so greatly deserve.

For the moms who will be celebrating via Zoom because geography prevents a physical hug, we are ready and waiting to step into that gap. Every single person in our office has experienced this and we would love to meet you for coffee, hear about your kids’ adventures, and give you the hug they themselves aren’t able to deliver this year.

For the foster and adoptive moms who have committed to opening your hearts and homes, we believe you are single-handedly changing the world. Your love is making a difference in the most tangible way imaginable, and we are in awe of your willingness to risk – sacrifice, even! – your own comfort each and every day.

For the women who thought they’d be a mom by now, but that isn’t how life has played out, we know how heartbreaking this day can be for you. We know you may be tempted to stay home, avoid social media, and dodge the awkward sympathy that may come from well-meaning friends and family. You are not forgotten, and you are not invisible. Be encouraged to give yourself the self-care you need today, in whatever form that may be.

To the mommas whose babies are waiting for you in Heaven, we grieve with you. We know that however briefly you held them, they will always be in your heart.  You are no less important on this day. We would not dare to suggest that we know all you have been through, or even begin to imagine the pain you have endured, so we won’t offer empty platitudes. But you are in our thoughts and hearts more than ever on this day.

And for those of you for whom this day evokes painful memories, we wish you nurturing relationships to help heal the hurts and mend your hearts.

Wherever your heart is this Mother’s Day, we want you to know we are grateful for you.  We are here if you need a shoulder to cry on or an ear to speak to.  We are looking forward to many years of celebrating life’s triumphs and heartaches with you as friends.

To all the women who have offered motherly wisdom and guidance into our lives, we want to wish you a very happy Mother’s Day.


Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

The Watch List… May 1, 2024
Downloads: The-Watch-List.pdf

Here at Hudock Capital Group, our team has a “watch list” of economic factors, market data, and ongoing storylines that we keep an eye on.  Sometimes, we move some items up or down on the list, depending on the impact we expect them to have on the markets.  By doing this, we can be proactive when making investment decisions…and we can also ensure that you stay current with what’s going on.

Recently, a few items have dominated our watch list that we want to update you on.  While the markets have had a good year overall – the S&P 500 gained 10.2% in the first quarter alone1 – they were somewhat more volatile in April.  That’s largely due to three factors: GDP, inflation, and what both mean for interest rates.  So, with your April statement, soon to be in your hands, we figured it was a good time to explain how these factors are affecting the markets.

Let’s start with GDP, or gross domestic product.  GDP is the value of all the goods and services produced in a given period.  Typically, a rising GDP indicates a healthy, growing economy.  Here in the U.S., GDP growth has been positive for seven consecutive quarters.  In fact, on April 25, the U.S. Bureau of Economic Analysis reported that the economy grew by 1.6% in the first quarter of the year.2  But then a funny thing happened.  When the news came out, the markets promptly slid.

Now, at first glance, this might seem counterintuitive.  After all, isn’t the economy growing a good thing?  If so, wouldn’t the markets go up on that news?

The daily movement of the markets is always driven by a variety of factors.  In mathematics, we know that 1+1 always equals 2.  In physics, we know that e=mc2.  (Don’t ask us to explain why, though.)  But the markets are not governed by consistent laws.  They are driven by data, yes, but also by the context surrounding that data…and by the emotions that context provokes.

In this case – and likely for the near future – there is a lot of context to consider when trying to parse any economic data.  In this case, the context is as follows:

While the economy expanded in Q1, that growth was much lower than economists thought it would be.  Most had forecast the nation’s GDP – the value of all the goods and services produced in a given period – would rise by around 2.4%, not 1.6%.2  And the Atlanta Fed had estimated a 2.7% gain.3

This disparity between forecast and results was largely due to lower consumer spending.  While spending did increase in Q1, to the tune of 2.5%, this was also lower than economists estimated.2  A small decrease in exports and a slight increase in imports also dragged GDP down for the quarter.

That brings us to the second factor, inflation.  On the same day as the most recent GDP report, the BEA also reported new data suggesting inflation may remain “sticky” for the foreseeable future.  The Personal

Consumption Expenditures (PCE) price index, which measures the change in the prices of goods and services purchased by all consumers in the U.S., rose by 3.4% in Q1.  That’s a big jump from the 1.8% mark we saw in Q4 of 2023.2

Normally, the fact that the economy grew at all would still be cheered by investors, if for no other reason than what it might mean for the third factor: interest rates.  As you know, the Federal Reserve has kept rates elevated for the past two years to help bring down inflation.  Since higher rates typically lead to less borrowing and lower spending, they are effective at cooling prices down.  But when the rate hikes began, many experts thought they would also cause the economy to decline

So far, that hasn’t happened.  So, investors figured that lower inflation, combined with a strong economy, would prompt the Fed to start lowering rates in the spring or early summer.  (This expectation is one of the main reasons the stock market has performed so well over the last year.)  But with inflation trending higher again, it’s now unlikely the Fed will cut rates anytime soon.

For investors, though, all this data suggests a new potential problem: stagflation.

While inflation is never easy, the pain has been cushioned somewhat by the fact that our economy has continued to grow at a healthy rate.  But what if prices remain high while growth becomes stagnant?  That’s stagflation.  It’s rare, and to be clear, we’re still a long way from that.  But Q1’s lower-than-expected GDP, combined with an uptick in inflation, now makes it a possibility our team has added to our “things to watch” list.

Now, it’s important, that we don’t overreact to any of this.  While the markets move around like a motorboat, affected by every rock and wave, the overall economy turns like an aircraft carrier.  The data we see from one quarter may not make its true effects known for months to come.  So many outcomes are still in play. The economy may slow just enough to bring down inflation without stopping altogether.  (That would be the Fed’s preference.)  Finally, new factors may lead to the economy accelerating again in Q2 or Q3 while also keeping prices high.  (In other words, a continuation of the status quo.)  One lower-than-expected quarter is just a data point, not a guarantee of stormy waters.  It’s important to keep an eye on it, but for now, our team will remain confident in our course.

For us, the key thing is to steel ourselves against an onslaught of data in the coming months that may seem counterintuitive or even contradictory.  We must always do our best to put everything in context while being aware of the emotions that context provokes in us.  By doing that — by keeping our emotions in check and not overreacting to every report or headline — we will be best positioned to remain on track to your long-term goals.

As always, we will keep you apprised of what’s going on in the markets and why.  We are constantly monitoring the items on our watch list and will continue to do so.  So, if you ever have any questions or concerns, we are always here to address them.  Have a great month!


Barbara B. Hudock CIMA®, CPM®
Chief Executive Officer
Founding Partner

Michael J. Hudock, Jr., CPM®
President and Founding Partner
Wealth Consultant

1 “Stocks close out 2023 with a 24% gain,” CBS,
2 “GDP growth slowed to a 1.6% rate in the first quarter,” CNBC,
3 “Stagflation fears just hit wall Street,” CNN Business,

Back To Top