About thirteen years ago when I started my career as a Financial Services Professional, I was almost instantly astute to the number one factor that determines client success. Of course, this determination was solely my own opinion. I’ve never turned on CNBC and heard scientific data backing it and likely never will. You can nearly ignore researching passive management vs. active management, throw out a comparison of exchange traded funds vs. mutual funds, and forget all about whether a Roth IRA or Traditional IRA suits you best. I believe the number one determinate of success that a client must have is “Proper Expectations”. It is by no coincidence that I believe Moore Financial Solutions clients have extremely reasonable, and ultimately the proper, expectations regarding investing. Investing long term is no casino, rather a patient approach to creating current income and future earnings. Prior to gaining licensure to be on your side financially, I know people that panicked and sold their entire portfolio and moved to cash positions in the Great Recession of 2008-09. They told the story years later to me regarding the vast missed opportunity and harm in locking in the losses. Imagine an investor panicking in Q1 of 2009 and selling stocks below 700 on the S&P 500, an index that is about eight times higher today at 5,635 (1). The S&P 500 would see gains of over 75% in the eleven months to follow, peaking this client’s FOMO and desire to get back into the market, only to sharply drop 16% over the next two months (2). My advice to you, and the number one way I can help you with your investment success, continue not being like this example investor. But rather, stay rooted in your investment philosophy. Realistically, the stages of someone’s investment life are humorous. We typically have little money early on, and it is easy to overcome the emotional impact from the money movement (a 10% decline in a portfolio of $2,500 might equate to a couple days’ earnings). But the problem is, there aren’t ample funds in that portfolio to provide life-changing growth either. For example, last year’s approximately 25% increase in a hypothetical S&P 500 index would have added only $500 to that portfolio. You want to play in the big leagues? Think you can handle the emotional impact of stocks and bonds? Try having an account of $750,000 or $1,000,000. You might want to pick up a fun hobby known for reducing stress, because there are going to be times when your portfolio hits rough spots. But there is good news too. Mathematically, just a 5% return on one million dollars is a gain of $50,000, and the reward for taming the emotional torment is much greater. Sadly, Q1 2025 was a great month to lean on those stress-reducing hobbies because the S&P 500 moved 4.59% lower for the quarter (3). Additionally, the S&P 500 moved 8.66% lower from February 19th, 2025, to the end of Q1 (4). Though the 4.59% has some sting to it, moving down nearly 9% in 40 days undeniably tests the emotional resilience of an investor, and we understand this firsthand. We are excitedly moving forward with this quarterly review to discuss what moved markets, tariffs, and what opportunities may arise. Without question, Wall Street found it very difficult to plan around the Trump tariff shifts. On January 26th, 2025, President Donald Trump announced a 25% tariff on Columbian imports as President Gustavo Petro attempted to decline inbound Columbian migrants. Petro retaliated with a 25% tariff against United States made imports. Shortly after, Petro begrudgingly received the migrants, and the trade dispute 2 ended, providing our president a quick trade war win. Moore F.S. believes this quick victory would go on to fuel President Trump’s confidence using tariffs as weaponry. On February 1st, 2025, President Trump laid the foundation for a 10% China tariff and 25% tariffs on Canada and Mexico. Just two days later the president would signal a 30 day pause on each of our neighbor’s 25% tariff (5). These back-and-forth movements continued off and on for much of the first quarter, with many tariff strategies subjecting only specific industries, e.g. automakers or steel producers, creating not only volatility in the broad stock market but especially within specific industries caught up in the talks. President Trump has labeled April 2nd, 2025, as “liberation day” signaling a big event. Throughout this back-and-forth, Moore Financial Solutions has made every effort not to be on the “wrong side” of the trade and has remained well rooted within our equity portfolio, when appropriate. We view, as mentioned in previous quarterly reviews, the volatility within the stock market as the “cost” or “price” paid emotionally to be able to receive the effective returns stocks could offer. In greater detail, rather than Moore F.S. attempting to time markets or predict the president’s next move and potentially being wrong, we’ll ride the storm out. Although Moore F.S. does not predict a bear market (described as a move down of 20% in the stock market), we point to the resilience of the stock market, overcoming all 29 previous bear markets and having done so rather quickly, taking an average of only 289 days to recover from the drop (6). Though we can’t rely on past market performance to guarantee its future, we believe this reaffirms our approach to using the stock market for clients with a long enough time horizon and ability to pay the emotional “cost” of seeing a portfolio move lower. Moore F.S. has theorized in past quarterly reviews, with no data to back it up, algorithmic trading (computers buying stocks at a “floor” or low point which might give the market support), and a trend of increasingly younger portfolio managers who have only seen speedy recoveries and long bull market rides might reduce the average bear market duration.

It is with great pleasure to work as your trusted advisor for another year! We hope you and your family had a Merry Christmas and you’re headed into a Happy New Year. To the surprise of some other financial firms, the stock market created sizable gains in 2024 with the S&P 500 increasing 23.3%, ironically within 1% of the year prior’s 24.23%. Additionally, that same market index returned a modest 2.06% in the fourth quarter of 2024, with all figures mentioned not including dividends (1). With Q4 of 2024 hosting one of the biggest elections of our lives, at least as described by some, we plan to discuss how our money management strategy evolves. We proudly stayed true to our strategy and didn’t decrease our allocation to stocks, while many other firms were selling covered calls and reducing their allocation to stocks as they incorrectly predicted a downturn in the markets for 2024.  Even if you were living under a rock, you were likely informed that Donald Trump is headed back to the White House. We reference this change with the understanding that the leadership of current President Joe Biden is quite contrasting to the leadership we’ve seen from Donald Trump in the past, and his campaign promises. The Federal Reserve seemed to have had to slightly adjust their projected pace of rate cuts with the understanding that Trump will be more favorable to the economy through deregulation, corporate tax cuts, and repatriation of jobs. These factors, along with the deportation initiatives, may reignite inflation in the short term. The Center for American Progress puts the undocumented immigrant population in the United States at around 11.3 million, with 7 million of them working (2). To make matters worse, many of these jobs are considered “difficult to fill” and/or “less desirable jobs”. We believe the Federal Reserve felt the need to signal plans to slow rate reductions, after reducing rates in 2024. In September, the median projection for the end of 2025 implied four more rate cuts next year, but the median projection from December’s meeting only projects two more cuts (3). Below is the Federal Reserve’s dot plot, which is a chart that visually represents each member of the Federal Reserve's policymaking committee's projection for where they expect the federal funds rate (the benchmark interest rate) to be over the next few years.

With an election looming and the market going through what has historically been a bearish period for stocks, all eyes are on the Federal Reserve regarding their interest rate policy. The third quarter of 2024 offered positive returns for the S&P 500 of 5.53% (not including dividends) to close the quarter at 5,762.48 (1). The real narrative of Q3 is the emergence of bonds finally complementing stocks and producing a positive return, as illustrated by the iShares 20+ Year Treasury Bond ETF (ticker TLT) being up 6.89% (without dividends) (2). We’ll discuss our active management as well as more thoroughly discuss our fixed income strategy. Additionally, we plan to highlight allocation strategies regarding various asset classes as the Federal Reserve goes through their interest rate decrease cycle, and of course we’ll discuss potential impacts from the election. In our last quarterly review we offered, “We currently expect that rate cut to occur during the fourth quarter of this year, or slightly sooner.” This was far from a bold prediction as most of Wall Street agreed on this timing. Nonetheless, September 18th, 2024, was a huge day for the markets and Moore F.S. as the Federal Reserve reduced rates by .5% (3). However, the rate cut of .5% was slightly higher than the typical .25% cut, leaving some wondering if this was a sign the Federal Reserve should have reduced rates sooner and more gradually. As a reminder, the Federal Reserve had to aggressively increase rates to stomp down inflation that had arisen very quickly, and this rate decrease was a means to normalize rates in response to normalizing inflation data. In the opinion of Moore F.S., the bond market was not only pricing in this normal rate reduction, but additionally pricing in a recession, an event that would even more significantly decrease interest rates. In other words, as time went on without a rate decrease, some feared this meant a “hard landing” was in store for the economy because not only did Jerome Powell drive down inflation, but he potentially drove down growth by leaving rates too high for too long. Moore F.S. stayed true to our belief, and continued to voice a high likelihood of a “soft landing” in which the Federal Reserve’s timing of rate reduction is just right, or at least close enough. In this Goldilocks situation that we forecasted; Americans were earning interest income at a much greater rate given the sudden increase in rates which increases their discretionary spending. In addition, the labor market remained strong, thus keeping the economy very strong and resilient in the face of higher rates. On September 18th, 2024, Jerome Powell stated, “Our economy is strong overall and has made significant progress toward our goals over the past two years. The labor market has cooled from its formerly overheated state. Inflation has eased substantially from a peak of 7 percent to an estimated 2.2 percent as of August. We’re committed to maintaining our economy’s strength by supporting maximum employment and returning inflation to our 2 percent goal. Today, the Federal Open Market Committee decided to reduce the degree of policy restraint by lowering our policy interest rate by ½ percentage point. This decision reflects our growing confidence that with an appropriate recalibration of our policy stance, strength in the labor market can be maintained in a context of moderate growth and inflation moving sustainably down to 2 percent.” (4) We interpret this information to be straightforward and we give the Federal Reserve credit for the transparency it has given regarding policy change. In our opinion the bond market was pricing in a mild recession while the Chairman of the Federal Reserve was giving the message of confidence within the United States economy, it became the opinion of Moore F.S. that appropriate allocation changes needed to be made within our fixed income assets. On September 19th, 2024, we began the process of decreasing duration within our fixed income assets by selling our nearly million dollar position of iShares 20+ Year Treasury Bond ETF (ticker TLT) and received an approximate price of $98.95 per share. TLT closed the quarter at $98.10 (5). This longer duration debt ETF was generally replaced with the Blackrock Short Duration Bond ETF (ticker NEAR). This decision was reached for two primary reasons. First, we believe that TLT has moved rapidly higher on fears of a recession, not simply the Federal Reserve’s policy change. As rates ease back up as we envision, we believe that shorter duration debt will outperform. In other words, the bond market has gotten a bit ahead of the Federal Reserve. Secondly, TLT offered a yield of about 3.4% compared to the more attractive yield of about 5.14% in NEAR. We aimed to be heavily in long duration debt while interest rates decreased, and now aim to shift into shorter duration holdings. Not all clients hold fixed income funds. Though Moore F.S. tries to stay away from interest rate prognostications, we believe the yield curve will move entirely out of the inverted stage in 2025 as the Federal Reserve moves the Fed Funds rate back to a more normal level. Currently, the curve is still inverted in some areas. We believe banks will be a significant beneficiary of the normalization in interest rates as their lending operations become more profitable. When the yield curve is inverted, profit margins tend to fall for companies that borrow cash at short-term rates and lend at long-term rates, such as community banks (6). In other words, your bank was probably not as excited as you were to see moderate term certificates of deposit paying 4.00% and mortgages written at 6.5% than they would be to see rates on their deposits earning .5% and mortgages written at 5.00%. Simply put, banks care about the spread in interest rates not one given rate. In response to a normalizing yield curve, and potential steepening of the curve, Moore F.S. clients sold broad market ETF’s and purchased Goldman Sachs (ticker GS) within the third quarter. This, like the conversation regarding TLT previously, only applied to some accounts where we viewed this action as appropriate. In addition to the interest margins improving for Goldman Sachs, we see this adjustment as an advantage to investors for two reasons. First, Goldman Sachs offers a better P/E ratio than the broad market at approximately 16. For more information on P/E ratios please see our First Quarter ’24 review in paragraph two where we discuss how P/E ratios influence our management approach. Secondly, Moore F.S. is always attempting to keep expense ratios lower by using single stocks in small weightings when appropriate. We hope this exemplifies the firm working hard to keep your expenses under control, while many other firms might simply use pre-built models, passing that higher cost on to you. We feel it is important to mention that Moore F.S. will never attempt to time markets, but rather react to public information and manage each account individually to the best of our ability. Below charts the spread between two and ten year U.S. treasury obligations, which is generally the spread analyzed The yield curve on September 30th, 2024, showing short term debt obligations paying a higher yield than long term obligations by most technicians. Historically investors have been rewarded with a higher yield for risking their money for a longer duration, but not always. Keep in mind, ultra short rates, such as the three-month treasury obligation offer 4.73% (7), and moderate term rates, such as the ten-year treasury obligation offer 3.81%, as of the last day of the quarter (8). We feel this temporary inversion is holding banks like Goldman Sachs back from their full potential. From the perspective of the stock market and global economy operating smoothly, we view the best election outcome as one with a clear winner, with conventional wisdom offering that a result that drags on for days is bad for markets. With two candidates offering quite contrasting plans and visions, we see corporations as most likely in a holding pattern, waiting for more clarity in variables such as corporate tax rates or manufacturing location incentives. We imagine these are the same corporations that have been in a holding pattern waiting for more clarity on the path of interest rates for the last couple of years. We feel that corporations benefit from stability and clarity, and when those are low, our best chance to manage portfolios appropriately is to not take a side, but rather, feel that our portfolios can benefit from either candidate winning. Once the election is passed, we will plan to craft portfolios in the fourth quarter in preparation for 2025 based on our view of the path of leadership. With another quarter passing by, I want to take a moment to thank you for your continued trust in me as your advisor and remind you that your financial goals are my professional goals. As I continually say, investing on any scale tends to be an emotional experience and I very much try to cushion that emotion for a client, if possible, without becoming too conservative. In other words, I must walk a fine line between selecting assets that blend well to potentially bring correlation or risk down in a portfolio, without including such conservative assets that reduce our chances of hitting your long-term goals. This will be my fourth U.S. presidential election while entrusted to manage assets, and my focus tends to be twofold; not try to predict a winner in my style of investing and to get clients through it. One key take away I have from listening over the years is how people have managed their own money through elections. Though I don’t have solid research or data to back it up, it is my experience that do-it yourself investors often make far too drastic of allocation changes that are far too dependent on the outcome they have predicted. I highly encourage you to take just a moment to think of someone that could benefit from the no pressure advice and strategies that Moore F.S. offers. In today’s transient labor market, everyone knows someone that has transitioned jobs and has left behind 401(k) assets. Think to yourself how those assets might perform sitting there, compared to how they might succeed over long periods of time at Moore F.S. My hope is for you and your family to have another great holiday season and a great end to 2024 between now and my next review. As always, I’m personally just a phone call away if you need anything or have any questions. Tyler A. Moore

The party continues through the second quarter of 2024, as the S&P 500 rises another 3.92%, not including dividends (1). After a fruitful 2023, where the S&P 500 climbed 24.23%, coupled with a surprising Q1 of 2024 where it ran up another 10.158%, we felt like it would be a victory just to maintain those levels for the second quarter (2). However, the strong buying momentum of the U.S. stock market continued, as consumers remained strong despite the Federal Reserve’s policies to slow the economy with higher-than-normal interest rates. Join us as we review the financial impacts of the last quarter and discuss our forecasts for the rest of the year. Interest rates increased slightly within the second quarter, illustrated by the United States 10-year Treasury Note moving up from 4.205% to 4.402% (3). Though the Federal Reserve did not increase their rates, the treasury yields that are priced based upon supply and demand moved higher. This remains troubling for bond investors. Additionally, the largest Moore Financial Solutions’ fixed income holding, the iShares 20+ Year Treasury Bond ETF (TLT) moved lower for the quarter. This approximately 3% downward move from $94.62 to $91.78 decreases the total return on a balanced portfolio (4). Many Moore F.S. investors that are near their goal, such as retirement, cushion the volatility of stocks with these bonds. In a quarter where bonds moved three percent lower in value, a balanced investor (holding stocks and bonds) likely didn’t feel much of the stock market party we mentioned. We feel this interest rate increase occurred because of the continual theme that rate cuts from the Federal Reserve have been pushed farther down the road. It seems Jerome Powell is putting more weight on the risk of cutting rates too soon, and not fully beating inflation, as opposed to cutting rates too late and the economy being weighed down from rates being too high for too long. Moore F.S. has remained committed to only using fixed income and bonds when necessary. We believe investors with long time horizons and the ability to tolerate stock market volatility should remain fully allocated to stocks, which historically have provided a higher return, although we can make no guarantees for their future performance or that they can’t lose money. For investors using fixed income, our investment strategy (when appropriate) is to diversify their fixed income holdings with longer duration bond holdings, like the TLT mentioned above, and shorter duration treasury bills. We believe longer duration treasuries will gain value when Jerome Powell finally cuts interest rates. We currently expect that rate cut to occur during the fourth quarter of this year, or slightly sooner. We feel Jerome Powell isn’t comfortable with zero rate reductions for 2024. If you’re anything like us, May 16th of 2024 was a special day, we were finally able to wear our Dow 40k hats as the Dow Jones Industrial Average reached record high levels of 40,000 points. The recent stock market performance has been so productive that it only took 873 days to move from 30,000 points to 40,000 points (5). Our purpose of reflecting on these numbers is to advocate to readers of the potential to build wealth in the stock market. Additionally, we don’t particularly care for the Dow Jones Industrial Average as a benchmark as it is only comprised of 30 companies, compared to the S&P 500 holding 500 companies. However, we feel that the perspective of the stock market’s long-term ability to potentially create gains can be illustrated by comparing Dow Jones values at various times. Only about four years ago with the Covid-19 stock market scare, the Dow traded at about 20,704 in the week of March 24th, 2020, signifying a near doubling of the index since then (6). When I began my career as a financial professional with First Investors in the week of July 19th, 2012, the index traded near 12,943, seeing a better than tripling effect from then to now (7). In response to the Great Financial Crisis of ’08-’09 the Dow traded at only 6,875 in the week of March 4th, 2009 (8). It is because of these prices on these dates that we feel the stock market offers the ability to potentially ride out ups and downs and build wealth long term. To use the example of the Covid-19 scare, Moore F.S. was continually reminding clients that we believed they should stay put in equities, as opposed to the emotional reaction many investors had to sell and move to cash. We believe there is significance in reaching these emotional values so rapidly and, as we have mentioned in recent quarterly reviews, we believe confidence in markets remains at near record high levels and is increasing. To use the analogy of climbing a mountain from 20,704ft. to 40,000ft., take a moment and look around and be proud of your accomplishment. If you’re new to Moore F.S. you might not be entirely aware of our strategy as it relates to investment holdings. Our aim is to keep your investment holdings’ costs very low, and not, for example try to generate revenue on another 1% mutual fund charge. Instead of higher cost mutual funds, Moore F.S. strives to use exchange traded funds, such as our largest holdings the iShares Core S&P 500 ETF by Blackrock (ticker IVV). This funds’ expense ratio is only .03% (9). To take that one step farther Moore F.S. uses single stocks (no expense ratio) if the situation is appropriate and allows. In March, Moore F.S. added the position of Natural Grocers (NGVC) to nearly all our managed accounts in optimism of the company’s position moving forward. NGVC moved higher in Q2 to close June 28th, 2024, at $21.20 (10). We feel strongly about the future growth potential of NGVC, particularly their ability to grow their own line of products and price them accurately and with competitive advantage. Sadly, our largest single stock holding, Builders First Source Inc. (BLDR) moved approximately 33.63% lower in the second quarter (11). If you’ve been around a while you remember Moore F.S. began buying the BLDR in the mid to low 40’s back in 2021 and have continued to buy at virtually all levels. This movement lower in the BLDR creates even more reasons to hold the stock in our opinion, as the P/E ratio has dipped below 12 (12). We feel that the Federal Reserve not having the ability to print more houses signifies great opportunities in the BLDR. Moreover, traders seem to have been overly cruel to the BLDR, weighing higher interest rates and a hunger for short-term gains in other areas of the market, such as technology. With this quarter seeing the broad stock market at higher levels than last quarter, all eyes remain on the Federal Reserve Chairman Jerome Powell. Traders hope that he will hint at whether rate cuts will begin in the third or fourth quarter of the year, with very few expecting that rate cut to come in 2025. My goal remains to manage every account as your advisor in a unique way and ultimately not be setting up portfolios to “need” rate cuts urgently. With an election year, the expectation of market volatility is high, and I personally encourage you to give me a call if you would like to discuss my strategy for your account or have someone you care about that you’d like to refer to the firm. To use the analogy given above, I’m proud to stand here at 40,000ft and it is with great pride to be your trusted partner when it relates to your valuable goals.

The exuberant party continued for equity investors in the first quarter of 2024 as Moore Financial Solutions clients again were rewarded for their holdings in equities (stocks). In our last quarterly review, we voiced confidence in equities stating, “Following a 20% or greater move in stocks, the market was up 22 of 34 of the following years, equating in a positive stock market return the following year occurring 65% of the time (1). We also stated that since 1952, the S&P 500 has averaged a 7% gain during U.S. presidential election years (2).” Our conversational benchmark, the S&P 500 climbed 10.158% in the first quarter of 2024, coming off of a 24.23% S&P 500 return for last year. This quick start to 2024 was a delightful surprise to many households owning stocks, and even a bit of a surprise to Wall Street, with few predicting such an immediately fruitful start to the year. We pridefully remained heavily allocated to high quality equities as they experienced their best Q1 start to a year since 2019. Take five minutes to review with us how we identify where we think exuberance ends and irrational exuberance starts, how just a handful of stocks have resulted in a major portion of overall gains, and how interest rates have remained higher than most predicted thanks to a sticky inflation problem. While Q1 was not without worry, we felt strongly about the sentiment of U.S. equities. If you’ve read previous Moore F.S. reviews, you know we put a lot of value into Price to Earnings ratios. The P/E ratio will measure a company's share price relative to its earnings per share (EPS) and help to determine how much investors are willing to pay for a stock relative to the company’s earnings (3). The current April 1, 2024, P/E ratio of the S&P 500 is an estimated 27.19, higher than average (4). However, in our opinion this is no indication of pulling the sell lever on equities, as analysts expect overall S&P 500 earnings to rise 9.5% in 2024, after increasing around 4% the prior year (5). With every historical downturn in the S&P 500 having been overcome, we feel that investors unknowingly become more faithful in broad U.S. equities to recover after a downturn, thus naturally leading to a higher P/E ratio. For example, now that the S&P 500 has weathered 29 bear markets since 1928, investors likely feel better about their chances of a recovery now than they did during the first ever bear market. We feel that the “buy and hold” clients, similar to the average Moore F.S. client, tend to drag that P/E ratio upward as we’re more willing to pay for future earnings, and just patiently wait out any downturns. We believe the consumer has been incredibly resilient, even through interest rate increases designed to slow them down, and that earnings will continue their upward trend. If the S&P500 continues with approximately $190/yr of earnings it seems it can expand another 9% before we feel there is a truly overvalued feeling at a 30 P/E ratio. Moore F.S. strategically uses Exchange Traded Funds (ETF’s) as opposed to mutual funds to give you an advantage of lower expense ratios. Where many firms you see advertised on T.V. simply move you over to a mutual fund for the management process, we specifically tune every portfolio, primarily with ETFs, hoping to avoid the high mutual fund expenses, often as high as 1% per year. However, there can be drawbacks or specific risks to ETFs, such as crowding into a small number of companies. For example, Microsoft is the largest holding within the S&P 500 representing approximately 7.23% compared to Mohawk Industries which represents only about .01% of the index (6). Thus, our largest holding, the Blackrock iShares Core S&P 500 ETF has approximately 723 times more weighting to Microsoft than Mohawk Industries. Furthermore, as your fiduciary we must strike a balance between riding the momentum wave of trends and moving away from them at the right time. “The Magnificent 7” is a nickname referring to seven of the technology giants that have far outperformed the rest of the broad market since the October 12th 2022 closing low price on the S&P 500 of 3,577.03 (7). Made up of Apple, Google, Microsoft, Tesla, Nvidia, Facebook, and Amazon, The Magnificent 7 returned 112% in 2023, outpacing the S&P 500 index by nearly 90%, and just booked a 17% average return for the first quarter of 2024 beating the broad market by 7% (8). To tie things back into P/E ratios, on January 24th of this year J.P. Morgan discussed how The Magnificent 7 trades at a P/E multiple of 29x, compared to the 17x P/E multiple of the median S&P 500 stock (9). However, we feel this trend will not continue, and although we were early to the interest rate decrease party, we feel strongly that when rates fall this will allow companies that have been left behind the opportunity to catch up. If things continue on this trend we envision utilization of equal weighted funds, that in the example above would own Microsoft and Mohawk Industries in equal weighted percentages. For now, we feel the top-heavy usage of ETF’s stand to continue benefiting from the Artificial Intelligence boom discussed in our past quarterly reviews as Microsoft and Google benefit from A.I. implementation more than a construction/flooring company, for example. Inflation isn’t just a main street problem, but rather a Wall Street problem as well. As mentioned in previous Moore F.S. reviews the average corporation’s bottom line can easily be eroded due to higher operating or input costs. Moreover, a higher interest rate environment typically leads to higher operating costs for a firm, as they typically choose to leverage debt for operations. Unfortunately, inflation isn’t ideal for stock market performance either, as the real return for stocks (the rate at which stocks produce gains above and beyond the current level of inflation) tends to be higher when inflation is only 2%-3% (10). We believe inflation has been far stickier than forecasted for a variety of factors. The two main factors include the economy simply being more resilient than anticipated and the elevated levels of interest income many Americans experience on their portfolios leading them to have more purchasing power. Moore F.S. is always fine-tuning portfolios, this is an example of our fiduciary stance in continually managing your money to ensure it is invested in a prudent manner. Moore F.S. added a position of Natural Grocers (NGVC) stock in Q1 ’24. With the average family in America seeing their net worth increase 37% from 2019 to 2022 (11), we believe they give themselves permission to spend more. But with energy levels reelevating and stubbornly high interest and inflation rates, consumers must still be tactical in their budgets. While fast food lines will wrap around buildings until the end of time, consumers are trending towards finding more value in higher quality food, for example comparing the price of a home cooked meal to a Big Mac. Though Natural Grocers isn’t likely to be a direct replacement for McDonalds customers, we believe a shift will occur up the ladder of consumers. Additionally, many consumers are growing impatient with the FDA and EPA to protect their food, with approximately 72 types of pesticides in use in the USA that are banned in Europe, accounting for over 300 million pounds (approximately a quarter of our total usage) of pesticides applied to our soils that would be illegal in Europe. Moore F.S. added this position at $16.94 and we see this as a long-term position requiring years to recognize the full effect of this trend shift. NGVC closed the quarter at $18.05 but reached $19.35 intraday within Q1. NGVC is lightly traded, so will likely remain volatile. For this reason, the position is small, but it is an attempt to create portfolio alpha within your plan, much like Builders First Source (BLDR) has been. While high-end food products are by no means recession proof, we believe many Americans have shifted to real food consumption and will likely not shift back even in the event of a recession. Additionally, Natural Grocers appears to have top notch customer retention plans. Another notable change within Moore F.S. holdings include selling Apple (AAPL). While Moore F.S. has used Apple’s size and global dominance as somewhat of a lightly held core position (with the idea of Moore F.S. being tasked with portfolio management and providing you a small area of expense ratio free products) a complete sell was elected for all Moore F.S. clients at approximately 172.33 as the Justice Department sues Apple in complaint that Apple has a monopoly within smartphone markets (12). Apple closed the quarter at $171.48. As we approach what appears to be another fruitful year within your portfolio, it remains my goal to personally manage every portfolio in a tactical and prudent manner. I view this year as pivotal regarding the economy’s ability to stand on its own while interest rates remain stubbornly high. While I began the year thinking the Federal Reserve would reduce interest rates three or four times within 2024, I’ve been humbled to hoping for one or two rate cuts. Regardless of the size and timing of interest rates, I feel the consumer is good and will continue to lead to strong stock market performance, with the occasion drawdowns as people take profits, a normal healthy function of the market. Every week we field calls regarding the strategy around interest rates and welcome all financial questions! I believe that if you have a good financial strategy, it can make your chances of success much greater in achieving your goals and am always eager to help you realize those goals. It is with great pride to be your fiduciary and together we make a strong team!

The time is finally here, your patience and discipline to hold tight in tough market cycles has been rewarded. The S&P 500 has made a Q4 2023 increase of 11.24%. This upward move in the S&P 500 from 4,288.05 to 4,769.83, was driven mainly by a significant decrease in interest rates (1). As we discussed in our Q2 2022 review, clients were asking, “when will the pain end and what will make it end?” Our answer at the time was, “In our opinion, if inflation readings can begin to show that Federal Reserve policy is having the desired effect, markets will begin to recover.” In December, Moore Financial Solutions investors celebrated news that the Federal Reserve’s primary inflation reading, the core PCE price index, created optimism that inflation had cooled. This measure showed only a 1.9% annualized rate for the past six months, based on Commerce Department data (2).

After the S&P 500 recorded an 8.3% return for Q2 in 2023, Q3 was a quick reminder of the downward trend equity investors have seen since the highest levels of January 2022. The Q3 2023 report highlights this quarter’s -3.65% S&P 500 move from 4,450.38 to 4,288.05 (1). With most Moore F.S. investors viewing their statements monthly, these last two months offer additional disappointment following a fruitful July, where the S&P 500 created a 3.11% return. We look forward to the quarterly reviews that highlight the many positive factors commonly on the horizon for U.S. equities, but for now, we are left detailing three major concerns within equity investing and a couple positives that may be looming. However, it remains my personal goal to not trade in and out of equities as these three issues could all hypothetically be resolved overnight, and Moore F.S. clients be left behind in the markets. Since you’ve likely been leaning on the Moore F.S. quarterly reviews to get quarterly general information on what is setting the trend in your account, you’ve likely understood some basics. A major influx of cash into the economy from quantitative easing (oversimplified as the Federal Reserve adding money to the money supply since the Great Recession) as well as direct payments to citizens during the pandemic created high inflation. If left untamed, this inflationary risk could go on for a few more years and then burst into a very deep recession, or worse. Monetary policy tightening can occur by the Federal Reserve (which we will shorten in title to “the Fed”) through interest rate increases, quantitative tightening, and increases to bank’s reserve requirements. The Fed has elected to continue a firm trend of quantitative tightening and a variable trend of interest rate increases. In other words, they aim to be data dependent on the rate of interest rate hikes, and continually monitor if more interest rate increases are needed. Thus, the stock market hangs on every word the Fed presents, in hopes of identifying the short-term direction of stocks. In Q3 the Fed seemed to suggest they were ok with rates staying higher for longer given the solidity in U.S. job markets. Up until this recent quarter, most of the Fed’s rate hikes have increased short term rates, while the long end of the yield curve was slow to react. The yield curve inverted, creating a strange occurrence of short-term yields being higher than long term yields. Moore F.S. bought more short-term debt in Q3 than any other debt. However, a major transformation occurred in Q3 2023, where longer-term interest rates suddenly increased as well. In Q3 2023, the U.S. 10 Year Treasury Note moved from 3.84% to 4.58% (2). We feel that the Fed is looking at the labor market to determine their success with interest rate increases, and they wish to see slight cracks in the labor market to ensure their battle against inflation is won. Moreover, we feel that interest rate movements are largely supply and demand driven, so until the bond market (bond investors) bought into the Fed’s determination to keep rates higher for longer, as the Fed has indicated, rates were too stubborn to move. We view the Fed’s conversation regarding accomplishing its goal as coming within 6-15 months based on these significant rate increases on the longer end of the curve. We see the Fed as a risk to the market, but also one of the greatest potential positive impacts to markets as well. The risk of the Fed’s overtightening could negatively impact markets, while the Fed signaling their work is done against inflation might be the driving factor to reach the previous 2022 market highs. Additionally, we believe the Fed will likely reduce rates within 12-18 months of their last interest rate increase, impacting stocks and bonds positively. Rate cuts occurred about eight months after the last round of rate increases, which ran from 2015-2018. These three rate cuts in 2019 were actions taken by the Fed in what the Fed referred to simply as a “mid-cycle adjustment” (3). Another contributing factor to Q3’s lack of performance includes the unprecedented strike of the United Auto Workers union (UAW) against the big three auto makers, General Motors, Ford, and Stellantis. Wall Street weighed the risks of the domino effect that a long-lasting strike may have. “Our theoretical math suggests that labor cost increases should largely be manageable for the D-3. Further, a work stoppage should keep inventories low and support prices staying elevated, which should be a near term offset for higher wages,” RBC Capital Markets analyst Tom Narayan said in an investor note (4). Automakers represent a basic economic example of the ripples that can be sent through suppliers and local communities. Areas where UAW labor makes up a large portion of economic activity could quickly see nonessential businesses (e.g., restaurants and entertainment) close their doors. While a small supplier of windows used in the production of cars could be sitting on inventory and loans needing to be paid and could be losing money quickly. We view the risks related to the UAW strike as potentially more impactful than just lost wages in Detroit. “When GM gets a cold, the suppliers get pneumonia,” said Arthur Wheaton who is the director of labor studies at Cornell University’s School of Industrial and Labor Relations (5). Clearly, it is best to resolve the stoppages sooner than later for the broad economy. We look forward to a resolution that avoids long-term concerns and believe a deal will positively impact the broad market, continuing the theme that this issue could be resolved overnight, and we must remain allocated to equities when appropriate. It couldn’t be a Moore F.S. quarterly review if we weren’t counting down the days until the next debt ceiling is reached, whether mentioned in our reviews or not. However, we feel each deadline becomes more difficult to reach a deal as the debt ceiling allowance ultimately is increased each time, it is currently above $33,500,000,000,000 ($33.5 trillion) (6). To put this into perspective, only three years prior this number was below $27 trillion. Another just in time deal was reached to keep the government operating until November 17th, 2023 (7). We find an uneasy feeling with the trajectory of deficit and the debt ceiling issues. Over the last year (since October 2022) the federal government’s spending exceeded its revenues by $1,524,166,099,656 ($1.52 trillion) (8). Additionally, we remain hopeful a solution can be reached before November 17th, giving the market some more breathing room. However, continually extending the debt ceiling is not fixing the underlying issue of spending, in the opinion of Moore F.S. In summary, Q3 2023 is ending with a high level of uncertainty. Most notably this high level of uncertainty pertains to the direction of interest rates, which hinges on the results of the Fed’s fight against inflation. My goal of highlighting the main three concerns the stock market faces (the Fed, UAW strike and the debt ceiling) is not to sound pessimistic, but rather to point out that the market has already factored in these concerns. We are excited for when the issues subside, especially as it relates to the Fed signaling their work against inflation is done. I realize that investing and seeing your money go up, down, or sideways is an emotional part of your life. In the same respect, I also understand that if we simply move all your assets to Treasury bills, which do offer a nice yield on short term money, your long-term positions will not be able to keep up with and outpace inflation in the way stocks and bonds have historically. As a result, my overall goal with you is to work in a balanced manner and remind you of the volatility that comes with investing in stocks or bonds. While there are no guarantees, the stock market has the potential to build your wealth, if you give it time. Historically, $1,000 into the S&P 500 in 1994 (a 30-year investment approximately) would now be $16,255.77, which represents a 9.91% return each year with dividends. Factoring in inflation, you’d be holding $6,827.13 worth of 1994 dollars (9). Thus, I believe if investors are willing to ride the ups and downs of markets their patience may be rewarded. I thank you for our strong partnership towards your goals and the trust you place in me. Tyler A. Moore TMoore@TMooreFS.com

After many quarters of muted performance, the U.S. stock market was able to record an 8.3% return in the second quarter of 2023. This move from 4,109.31 to 4,450.38 on the S&P 500 comes as welcomed news to U.S. stock market investors who have diligently waited for the storm of rising rates to pass (1) . This artificial intelligence (A.I.) boom in technology stocks sent stock prices and earnings expectations higher. This quarter, we’re excited to review our take on positive performance to the technology sector regarding A.I., recent positioning by the Federal Reserve on interest rates, and the Moore F.S. strategy on positioning of assets within your account. As the world rapidly evolves and mankind looks for the next big thing, it seems each quarter we can discuss a new global topic. Near a century and a half ago, electricity changed American homes and businesses meaningfully and opened the doors to the industrial production age. Looking back several decades, the creation of the internet increased business efficiency in ways few could truly fathom. Next on the horizon might just be artificial intelligence (A.I), which is a branch of computer science dealing with the simulation of intelligent behavior in computers and refers to the capability of a machine to imitate intelligent human behavior (2) . As a hypothetical, A.I. could design your kitchen remodel and give you infinite options to consider. A.I. is open 24/7 to immediately answer every question you ask about kitchen remodeling. Then, when you give the approval, it can have the complete product list in your virtual cart or that product list waiting for pickup at the local home improvement store. A.I. could create an immediate boost to the financials of some companies, in this case, the home improvement store. Goldman Sachs strategists estimate that generative AI could create productivity gains that result in S&P 500 companies expanding profit margins by about 4 percentage points in a decade following widespread adoption (3) . As a partial owner of S&P 500 companies, this might positively impact you financially. Many investors benefited from the iShares Global Tech ETF by Blackrock (IXN) which posted a 38.72% increase for the first half of the year, plus dividends (4) . It benefited significantly from Nvidia (now the third largest holding) surging 189% on increasing expectations of future microchip dependency partially fueled by A.I. implementation (5) . But A.I. likely comes at a huge risk, as many have discussed recently, due to increasing fears of the line between computers and human emotion being blurred. Although we won’t predict the timeframe or likelihood of implementation, we feel there is potential for companies to monetize A.I. in a safe and effective manner. The Federal Reserve has clearly indicated their goal of 2% inflation and has used interest rate increases and balance sheet reduction as their primary means to accomplish this goal. These tools make the cost to borrow money high and money harder to come by, as there are fewer dollars floating around the economy. In May, the Federal Reserve raised rates by a quarter of a percent. A month later in June, they did not raise rates and voiced their intent to pause increases for that month. The S&P 500 responded nicely to this news, with a 6.5% increase for June. We believe Jerome Powell will utilize interest rate increases two to three more times, then, potentially back off within 18-24 months with a rate decrease. We use the inverted yield curve as the reasoning behind this. Currently, Moore F.S. can utilize a 1-year U.S. treasury that yields about 5.25%. By contrast, a 20-year U.S. treasury only yields about 4.25%. Thus, the fixed income market is tipping its cap to rates likely not being as high a few years from now, in our opinion. Moore F.S. has adopted a strategy of buying short-term treasuries with a portion of the cash held in accounts, when appropriate for clients. Thus, instead of operating at a 1% weighting to money market funds, in many situations, we are reducing the cash to buy ultra short treasuries to take advantage of this yield opportunity. These ultra short treasuries are often purchased at a discount, $975 hypothetically, and typically mature at $1000 a few months later. We take seriously the task of making your money work hard for you and make every effort to create interest within your account. We welcome you back to the era of being able to receive decent interest on low-risk savings and believe inflation has created a higher need to ensure money isn’t sitting at a bank earning almost zero interest. At Moore F.S. we strive to voice our goals and how we work with clients. Pridefully, we act as your fiduciary, meaning Tyler Moore will always manage your funds with what is your best interest, as opposed to simply setting up your funds and not providing on going management, as many firms will do. One very tough aspect of our strategy is riding out the down markets and resisting the urge to make changes. For example, in 2021-2022, we added Covid-19 recovery names such as Carnival Cruise Lines, Builders FirstSource Inc., Royal Caribbean, etc. as we anticipated vaccine development, herd immunity, and emotional tolerance of Covid would lead to a more normal way of life soon (we use this as a conversational example and not all clients hold these assets). Our strategy was to remain committed to the broad U.S. stock market while adding slivers of assets that we anticipated would perform well (because these assets fell farther and faster than the broad market generally speaking) in an effort to create better performance in your account. Though these assets have begun to perform as expected and many are posting nice returns, the lesson here has been patience, as these assets have been susceptible to pain from interest rate increases, banking concerns, etc. The conclusions that we draw here are that some of the best strategies may at first stumble out of the gate, and at times may seem as if we should be making changes. Investopedia details “Odd-Lot Theory” as a phenomenon where investors are chasing trends, instead of remaining committed to their plan (6) . In booming markets, they aggressively buy into the market just before the peak. More than once we’ve heard something like, “it’s going to go to the moon I can feel it,” regarding assets like Dogecoin, Gamestop, etc. just to see these assets fall significantly. Additionally, in a panic, they sell their shares just before the market bottoms out, effectively buying and selling at the two worst times. It is in these down-market cycles that we aim to make our biggest impact on your money by remaining committed to our plan and your long-term goals. Some of the biggest investment mistakes were made by panicking out of the market only to get back in after the recovery, a situation Moore F.S. intends to avoid. In our strategy we will guide you through down markets and intend to guide you to better market cycles. We believe down markets will occur 20% of years and with the S&P 500 sitting at 4,450.38 today we have recovered 958.8 points from the October 2022 lows (up 27.46% since the lows) but need to climb another 368.24 points (8.27%) to get back to the January 2022 highs (7) . We remain extremely optimistic on the direction of U.S. equities noting the reliance of U.S. companies on fuel prices. June 2022 offered U.S. diesel prices near $5.754 per gallon whereas this June, companies celebrate a $3.802 average cost per gallon of diesel (8) . Additionally, a lower fuel price adds to consumer discretionary income. Moreover, the Federal Reserve claims work is not done as it relates to increasing interest rates, but in our opinion, we’ve likely experienced the worst of interest rate rises and the remaining increases are priced into U.S. equities. We feel these two factors in combination with a strong consumer still riding the sugar high of pandemic cash, and a strong labor market will serve as a strong back drop to equity performance. I’d like to thank you for the continued trust and faith you have in me as it relates to providing you with fiduciary investment management. One year ago, my quarterly review mentioned, “bear markets historically last 449 days when they precede a recession, compared to 198 when a recession does not occur” (9) . When markets have moments of sudden decrease it is tough on all of us, but we must remind ourselves not to be emotional and that, historically, broad equities will return to higher values. As a reminder, Charles Schwab will soon be the new custodian of all Moore F.S. accounts, and I look forward to answering any questions about this detail. Please refer to recent correspondence regarding this situation and feel free to call me directly with any questions you may have. I take pride in being your direct contact and remain committed to bringing you maximum efficiency through my platform, while providing the same personalized service you’ve come to know over the last eleven years. Tyler A. Moore 913-731-9105 TMoore@TMooreFS.com

The first quarter of 2023 provided an increase in the S&P 500 of 7.03% (1). This welcomed sight to equity investors occurred as the U.S. 10 Year Treasury Note moved from 3.88%, down to 3.471% (2). Without surprise, equities rallied, as corporations were eyeing a lower interest rate, as they prefer to operate with lower rates. Q1 of 2023 continued the trend of falling rates in the open market, while the Federal Reserve continued to raise rates. In this quarterly review, we discuss the divergence of decreasing open market rates against the increasing Federal Funds rates. We will also highlight the sudden banking crisis (felt mostly by regional banks), and the strategies surrounding rapid increases in short term rates. The Federal Reserve has been aggressively increasing rates. As mentioned in previous Moore F.S. reviews, interest rate increases help determine how quickly the economy will grow. Low interest rates generally mean an easier path to growth but may lead to an overheating economy resulting in inflation. A higher interest rate will reduce inflation but will slow the economy. Currently, Jerome Powell has raised rates multiple times to slow inflation. In many areas, a higher rate has set in, especially in ultra short-term rates. However, the Federal Reserve has struggled to get a meaningful increase on longer dated rates. Furthermore, shorter term debts (a couple years or less) have seen massive increases in yield while longer term debts, such as 10 to 30 year obligations, have increased much less rapidly. In our opinion, investors seem willing to bet that interest rates will not rise significantly over the next few years. Since investors remain willing to purchase treasuries yielding 4.5%, this keeps an invisible cap on rates. Last month the one-year U.S. treasury yield briefly went above 5% (3). Suddenly portfolio managers and fiduciaries had the solution to low yields that we’ve been searching for over the last decade. Just as suddenly, the stock market has a competitor of investment attention, the bond market. The 10 year treasury now offers approximately 3.5% yield, while only one year ago in late March of 2022, it paid only approximately 2.4% (4). This undoubtedly takes away demand from the broad stock market. We began using individual U.S. treasuries in Q1 due to the sudden surge of short-term yield. This marks the first purchases of individual treasuries for Moore F.S. as we found no need to buy treasuries with the previously extremely low yields. This recent addition allows Moore F.S. to purchase conservative government treasuries at a higher rate than bank certificates of deposit. We note two types of hypothetical investors regarding rates and inflation. First, inefficient investors two years ago (hypothetically) who purchased extremely low yield while their money was significantly eroded due to the high inflation over the next couple years. Secondly, investors experiencing high current short term treasury rates going into what may be cooling inflation. In other words, we aim to see a yield that is significantly higher than the inflation rate. Clearly Moore F.S. intends to be in the second group and although we are not giving the “all clear” on the risk of rising rates, we feel much better at these levels than we did a year ago. As your fiduciary we aim to reduce our exposure to bonds/treasuries while rates rise and own bonds/treasuries in flat or falling interest rate environments. If you stay up to date on Moore Financial Solutions quarterly reviews, you remember reading about Sam Bankman-Fried (S.B.F. as he is often called) and his real-life story of how not to operate a hedge fund, or any business for that matter. We recently discussed our stance on how S.B.F. and his operations were not connected to broad equity investments. This quarter the latest concern is Silicon Valley Bank (SVB). SVB was the 16th largest bank in the United States with assets of $209 Billion in December (5). Like any bank SVB took in deposits of customers and essentially drove revenue on those deposits in one of two ways; lend out deposited money for a higher rate or buy securities that offer a higher rate than the rate they pay on deposits. Examiners were able to determine the main detriment of the business was the over exposure to U.S. treasuries, like the 10-year treasury that we previously mentioned (6). Let’s dive into the fundamentals of a treasury note. A 10-year treasury note hypothetically issued today pays around 3.471% as discussed above. This investment is typically purchased for $1000, and 10 years later will mature, returning the investor’s $1,000, and each year along the way will pay interest of $34.71. Bonds contain financial risk in two major ways: inflation risk- the potential that the interest rate of 3.471% will lose purchasing power to inflation, and interest rate risk- a reduction in price of the bond due to a rising interest rate environment. Since everyone knew interest rates were rising (except this bank somehow), a limited amount was allocated to bonds in most cases. For example, Moore F.S. recently discussed that we trimmed bond positions July 14th of 2022 to let the “storm” of rising rates pass and buy back into bonds at a lower price. Furthermore, as interest rates were rising, the bonds that SVB purchased for $1000 were losing value. Yes, they would eventually mature 10 years later at $1,000 but SVB had to sell bonds to meet other obligations, and this led to a $1.8 Billion loss (7). The Sub-Prime Mortgage Crisis of 2008 taught us to understand that banks are closely related, and a “run on the banks” can cause a contagion effect. Thus, immediate action is needed. This problem is further complicated by the reaction of individuals and businesses to make a “run on the bank” and desperately/rapidly remove their deposits from the bank. To meet withdraw requests, SVB, in this case, needed to sell notes/bonds at a loss. For each $1,000 they invested in notes they only received $970 from the sale of the note, hypothetically. The more withdraw requests that came through, the more notes were sold at a loss, and this uncontrolled spiral led to the collapse of what was the 16th largest bank in the U.S. just 100 days prior. On March 26th, 2023, First Citizens Bank bought the majority of SVB deposits and stepped in to calm people’s fears (8). Markets have reacted positively, and although a few more banks have fallen, the threat of widespread bank failures seems limited. Moore F.S. aims to add a weighting to the financial sector as bank’s balance sheets remain healthy, and in our opinion, rates will remain high enough to positively impact profits. We believe most clients need to be in the stock market and willing to tolerate the volatility that comes with it. There are many things that can knock the market down; SBF, SVB, etc. and there will always be new problems coming, but we are going to continue to be disciplined in markets. Much like your home, there are always going to be issues arising, but tackling them as they come in is a much better strategy than selling your home. Likewise, volatility in markets doesn’t mean we should sell. In our discussions with clients, we spend a lot of time strategizing stocks because ultimately more strategy goes into a stock allocation than a bond allocation. Additionally, for many clients with a long enough time horizon, a full stock allocation remains prudent. However, bonds are making a comeback, and in some cases very rapidly. The rates that Moore F.S. can offer through holdings of short-term treasuries have jumped considerably. For example, two years ago (March 28th, 2021) the U.S. 1 Year Treasury Bill offered a less than desirable yield of .065% (9). The current yield to close the quarter now stands over 72 times higher at 4.689% . Furthermore, in those same two years the U.S. 10 Year Treasury Note yield only saw an approximate doubling from 1.72% to 3.471% (10). In the opinion of Moore F.S. we believe this offers an incredible opportunity for a higher yield than bank savings, while continuing to offer a conservative strategy. In our opinion, every interest rate tick higher by short-term treasuries creates more reason to avoid rushing to pay down debts that were issued in a very low interest rate environment. Please call if you’d like to discuss these strategies as we are getting many of these inquiries. Moore F.S. portfolios are created uniquely and individualized for every client. I not only take pride in this style of management, but I think this is truly the only opportunity to act as a fiduciary in managing the account. In the last six months I have seen an alarming rate of clients just following broadly based advice without identifying what is optimal for their individual situation. Luckily, these clients find better efficiency when they come to Moore F.S. I just want to take a moment to encourage you to ask questions and feel free to run strategies by me. Financial advisory is like health care, there may be some rules to live by that apply to most everyone, but the greatest treatment will always be individualized. Tyler A. Moore 913-731-9105 TMoore@TMooreFS.com