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

Q4 of 2022 offered an increase in the S&P 500 of 7.08%, as investors’ portfolios regained a portion of the losses brought on by a down year (1). During this most recent quarter, the S&P 500 pushed higher, before seeing a retreat to the closing price of 3,839.50 (2). We remain optimistic that market sentiment shows the continued opportunity and belief that this market downturn will end, and investors will be back to making money in stocks. In the opinion of Moore Financial Solutions, the sharp movement upward from the quarter’s opening price of 3,585.62 to 4,080.11 (13.79% increase) in the first two months of Q4 show investors’ belief that we will get past this downturn, and eventually return to all time market highs (3). As a point of reference, the S&P 500 briefly touched 4,797.70 in January, which represents the highest level of the year (4). This high point in the market is 24.96% above the closing price of 2022 (5). The year ended with a -19.44% return for the S&P 500, before factoring in dividends (6). This resulted in the second down year in the last decade, after factoring in dividends (7). One decade ago, the S&P 500 opened the year for 2013 at 1,462.42 and has moved up 163% (plus paid an approximate 1.5% dividend each year) (8). We reference this decade of movement as a reminder that if you are willing to tolerate the ups and downs of the market, it has historically generated returns. The Moore F.S. management philosophy remains the same; own a variety of diversified stocks touching on a variety of market capitalizations. For clients closer to their goals, or withdrawing from their portfolio, bonds become appropriate to ease the volatility of the portfolio. Focusing mainly on clients with long time horizons (funds invested for 10+ years), we do not believe bonds should be used. Many other firms that you see advertised include bonds in their portfolios, regardless of a long time horizon. We believe this is because they have a weaker relationship with their clients and feel the need to reduce volatility in a portfolio. By contrast, we aim to have a very strong relationship with our clients and educate them that stocks will move in both directions, and that they should plan to buy and hold for the long term. By eliminating bonds in these portfolios, we aim to buy and hold quality stocks which historically generate approximately double the return of bonds (9). Furthermore, in 2022 bonds did not offer the cushion that these large firms had hoped for. We believe this can be seen by examining the move of the iShares 20+ year treasury bond ETF (TLT), which moved from $148.19 per share to $99.56 per share in 2022, a reduction of 32.82% (10). Instead of using bonds that offer little upside potential, we aim to continue to use dividend paying stocks and value stocks, as opposed to purely growth stocks. In July, we moved $207,165.53 out of bonds as the Federal Reserve seemed determined to increase interest rates. Shortly after this move interest rates increased, and bonds decreased in price. These funds were later moved back into bonds to take advantage of the interest rate decrease on the horizon. As a reminder, bonds lose value as interest rates rise and gain value as interest rates decrease. At Moore F.S. we take pride in our money management style and continue to manage every account on an individual and personalized basis. We remain committed to always acting in your best interest while managing your money as an un-biased fiduciary. A major headline of Q4 included Sam Bankman-Fried and his titanic fall from an estimated worth of $26.5 billion, to being one of the most wanted white collar criminals in history. You likely have some knowledge of SBF, but we would like to highlight this event and lightly touch on bitcoin as it relates to your portfolio, or rather we should say how it does not relate to your portfolio. SBF is known not just for his funny hairdo, but for being the founder of FTX. You may have first noticed FTX by watching Major League Baseball, as the umpires wore it on their uniforms as a method of advertising. The MLB didn’t forecast that they were advertising a firm that was diverting client money into a completely different hedge fund to help pay its debts and create investments to the tune of $10 billion. Furthermore, bitcoin’s price moved down 15.02% in Q4 and is down 74.33% from November 2021 highs (11). We reference the SBF story as it is major news within Q4, and we reference bitcoin prices as a reminder that there is no need to reinvent the wheel in finding alternatives to stock investments, in our opinion. In 2021 the Moore F.S. phone would ring a couple times a week with questions regarding investing in bitcoin, and how this could be done on our platform. We are proud to say that we have never put a penny of investor money into cryptocurrencies and have no intention to. You’re likely not surprised that we haven’t received many questions regarding cryptos recently. Lastly, we think it is worth stating that all Moore F.S. investor funds are held at TD Ameritrade, which we feel is the best in the business regarding custodian of assets. A new year brings new challenges and new goals. We think 2023 will be a fruitful year for stocks if a few things can happen. Inflation data needs to show that Federal Reserve interest rate increases are having the desired effect in cooling the economy. As a reminder, an overheating economy creates a lack of price stability. We remain optimistic that the Federal Reserve will not overtighten financial conditions too quickly or too much. Earnings for corporations will need to avoid a dramatic decrease. Clearly, earnings may fall as a result of interest rate increases, as buyers electing to finance large purchases (homes, cars, etc.) can buy less units for the same monthly payment. For example, 30-year mortgage rates moved up approximately 3% from ~3.5% to ~6.5% throughout 2022 (12). This means a $250,000 home’s monthly payment moved up $457.56 from $1,122.61 to $1,580.17. This change erodes the buyer’s discretionary income for other items and will likely have an impact on their spending. To this point Moore F.S. aims to increase portfolio holdings of financials as their overall margins should improve. We have been cautious of increasing our weighting into financials because an inverted yield curve tends to not be favorable to the banking industry. An inverted yield curve means short term rates are higher than long term rates despite a long term loan being more impacted by many years of inflation. We encourage you not to overpay loans that have an interest rate of less than 5% as these funds could be better directed somewhere else, in our opinion. If you are actively overpaying loans of less than 5%, please reach out to us to discuss potentially more favorable alternatives. Keep in mind, if your mortgage payment is $1,000 per month, for example, after many years of inflation, that $1,000 per month may feel more like $750 per month one day. Additionally, by overpaying your loan you lose that liquidity, and if a financial emergency occurs you do not have that overpayment to draw back out, where you could access an investment account in an emergency. In our opinion, this is one of the few times where you can get a better rate and take a more conservative approach, conservative in terms of keeping your liquidity. It is worth stating that the avoidance of interest by overpaying is a sure thing in most cases, where the returns an investment could offer are generally not guaranteed, so this is worth taking into consideration. I want to personally take this time to wish you and your family all the best in 2023. Every account I manage represents someone’s goals and freedom to make their life better. 2022 was equally as tough on me as it was for you as the investor. Although I try hard to educate you that these years will happen, it doesn’t make them much easier to endure. There are things you can do to take advantage of the recent downturn in the markets. If you still have a medium or long time horizon you can get money into the stock market while it offers a better entry price than it did for most of last year. If you are withdrawing it may be a great opportunity to challenge yourself to decrease the withdraw amount. The stock market is like electricity within your home, when used correctly, it enhances our everyday lives. But, if used improperly, it can harm us. In my opinion, for investors with the willingness to tolerate the volatility of stocks, there is no better way to create passive income and wealth. It is with great pride that I continue to be your fiduciary and I welcome all your questions and concerns, even if it does not directly relate to the accounts I manage. My main goal is to make your life better by being in it, and I thank you for your continued trust and letting me manage your goals as your independent fiduciary.

The third quarter of 2022 saw a further decrease in equity prices, as investors wrestled with the thought of an impending recession. We believe the primary topic leading to equity selling continues to be policy action by the Federal Reserve to reduce inflation. The S&P 500 fell another 6.27% in Q3, continuing a trend of losing quarters for 2022 (1). This movement in equity prices may likely challenge the willingness to hold tight in down markets, but we remind Moore Financial Solutions clients of the patience required when investing in equities. This quarterly review will highlight strategies in down market cycles, P/E ratios of equities, and include a review of Federal Reserve Policy changes made in Q3 of 2022. Our clients find financial stability in periods of higher equity (stock) prices and often find themselves more willing to use funds for travel or planned home renovation, for example. By contrast, lower equity prices often create a commitment to be more disciplined with an investment plan. We encourage our clients to contribute (or increase contributions) to their investment accounts in these lower market cycles to prepare for a potential recovery in equities. 2022 has forced Moore F.S. to quickly change from a high equity price strategy to a sudden bear market strategy. Generally, this includes rebalancing into equities when appropriate, as well as an overall increased willingness to create new equity positions while markets are low. For many clients, we are looking to convert pretax money into post-tax accounts, when appropriate. Furthermore, we aim to increase allocations to small cap equities when appropriate. It is our opinion that small cap equities will rebound more sharply than large and medium sized companies. Our small cap strategy can only partially be put to work as we remain cautious of the impact higher interest rates can have on small companies who often operate on a more leveraged (debt heavy) balance sheet. A top goal of Moore F.S. continues to be the education of investing principles. This quarter we highlight changes for 2022 in the P/E Ratios. Most likely you haven’t heard of P/E Ratios, but their simple structure can give equity investors a detailed look into market cycles. First off, what is a P/E ratio? A P/E ratio measures a stock’s current price, divided by its earnings per share (2). For example, AT&T’s current price per share of $15.56, divided by its annual earnings per share of $2.71, equates to a P/E ratio of approximately 5.74. In other words, when investors buy AT&T, they could assume it would take 5.74 years to recoup their $15.56. We use P/E ratios to gauge where the market is in terms of overbought or oversold. To begin the year, the S&P 500 had a forward-looking P/E ratio of 23.11 (3). Investors were purchasing the S&P 500 with the understanding that based on the current rate of earnings they are offering up 23.11 years of earnings to make the purchase. By contrast, the current (September 30th, 2022) P/E ratio of the S&P 500 is 18.12. In the opinion of Moore F.S., P/E ratios are a simple tool to evaluate investor sentiment towards equities and determine what level of risk pertains to investing in equities. This gauge is not perfect and does not determine the direction of equities. When the S&P 500 is near a 23.11 P/E ratio, we determine investors are more willing to accept paying a higher price for equities for a variety of factors. For example, the real return on bond fund yields (after inflation) being less than exciting. The average modern era P/E ratio of the S&P 500 is 19.6, while the average P/E ratio of the last ten years is 26.6 (4). We sense investors continued to buy stocks when the P/E ratio was above its average in expectation that earnings would increase. Furthermore, we forecast a gradual move back to a 20 P/E over the course of 18-24 months. In talking with clients, we have stated that we are increasing our exposure to equities, especially for younger, risk tolerant clients. We continue to believe that by looking at a variety of factors, including the drop in P/E ratio below the average, stocks offer an ideal entry point. It is certainly possible stocks could fall more before a recovery occurs. With equities more favorable now than to begin the year (in terms of P/E ratios) we remain optimistic. We believe equities will rebound to a more average P/E ratio, and we remain hopeful the earnings associated with equities will continue to increase, and ultimately not see a recession. In the most basic form, when you buy stocks, you are paying up front for future earnings. It is important to remember that in the short term, equities can be volatile, but historically they offer a very sound opportunity to create wealth and according to P/E ratios, potentially now more so than to begin the year. The Federal Reserve offered policy changes during Q3 of 2022, as many predicted. On September 21, 2022, the Federal Reserve increased benchmark interest rates by .75%, representing another large and meaningful move. This increase took the Fed funds rate range to 3-3.25%. This represents the most aggressive Fed tightening since the Federal Reserve began using the overnight funds rate as its primary policy tool in 1990. In 1994 the Fed hiked a total of 2.25 percentage points. We later found out the Fed would begin cutting rates by July of the following year (5). We believe Federal Reserve Chairman Jerome Powell has surprised very few with this large rate increase. Moore F.S. sold all positions of iShares U.S. Treasury Bond ETF (GOVT) on July 14th, 2022, in preparation for the increases of rates. In cases that are appropriate for clients, we anticipate moving back into this and other bond positions in the 4th quarter of 2022. The iShares U.S. Treasury Bond ETF continued to move approximately 4.6% lower between July 14th and the end of Q3 (6). Bonds tend to offer an inverse movement with interest rates, as interest rates go up the value of bond funds go down. This downward movement in the value of bond funds as interest rates have risen, continues to negatively impact portfolios that hold bonds. Though we are not predicting the Fed to repeat their pattern of reducing rates the year following rate increases (as we mentioned above) this action would be a tailwind for bond funds in 2023, thus we aim to layer back into bond funds. The challenge of volatile equity markets remains an emotional experience. I urge my clients to always respect the power of what stock markets really are, an emotional willingness to put money to work into companies that offer long-term growth. Without going into too great of detail, we live in an environment where algorithms move stock markets and can move markets very quickly. In my opinion, this gives way to environments where the S&P 500 can move up 13.7% in the first half of the quarter (June 30th closing price of 3,785.38 to August 16th closing price of 4,305.20 (7)) and suddenly make a 50% recovery for the year. I can assume that somewhere out there an investor decided on June 30th they have had enough of the market downturn and decided to move to a money market account, only to miss out on the next approximately 45 days. 45 days later (lets assume) that same guy or gal had a bad case of “fear of missing out” and reinvested into equities, only to experience the move lower over the next half of a quarter. Of course, this is purely hypothetical, but I use this example to remind you that my job is not only to act as a fiduciary, but also to keep us grounded in our plan. In many cases we must use equities in your plan to be able to hit long-term growth goals. Otherwise, we will see your purchasing power be eroded significantly by inflation. I don’t know when the bear market will be over, and I don’t want to begin to make that prediction. Rather, I’d like to voice my continued commitment to buying and holding for the long term. I believe you and I continue to make a great team and we will weather this storm, and likely many more in the future.

The second quarter of 2022 reminded investors that volatility remains a function of long-term investing, as the broad stock market attempted to identify if the United States is headed into recession. As the S&P 500 posted another losing quarter, falling 16.45%, the market seemed to be pricing in a recession (1). The Federal Reserve moved interest rates higher to ease inflation while not showing much remorse for how financial markets were impacted. The Federal Reserve appears to be willing to slow the economy to avoid long term detrimental inflation. This Moore Financial Solutions quarterly review will detail the Federal Reserve’s actions, interest rate function/strategy, and how we aim to navigate the uncertainty moving forward. As I personally receive feedback from clients and aim to adjust to their needs, I am specifically tailoring this review to be more understandable to the client who holds less knowledge of financial markets/investment management. By the time you reached high school, you likely learned that your life will be most comfortable when you set a budget and stick to it. You may budget $500 per month for your family to spend at the grocery store, and for years that number worked. Suddenly, that same $500 no longer allows you to enjoy the quality of foods you’ve grown used to. As you plan meals prior to going to the store you find it hard to determine which recipes include a good balance of nutrients and cost because prices are changing so rapidly. In addition, some items have increased in cost much more rapidly than alternatives, leaving you less confident in which to select. Comparatively, companies are making many of the same tough decisions, with little clarity on which direction prices are heading. These small choices that families are presented with, draw comparison to massive multimillion dollar long-term decisions corporations are making. These characteristics lead to uncertainty within both your family and corporations. You may ask, “why do I care about corporations, I hear their greed is the problem”? The answer is simple: You own the corporations! You own them in your accounts managed by Moore F.S., through your 401k, etc. Clearly, when prices are increasing, this makes it tough for both large corporations and everyday families. Additionally, price instability is a huge concern and makes financial planning very challenging. We plan to detail how price instability occurs and the potential course of action to mitigate it. Covid-19 sent shock waves through the system and created an imbalance to many individuals. Those in the service/hospitality industry were struggling to make ends meet, while those in the I.T. industry were saving money working from home. As it was difficult to determine quickly who needed help the most, direct payments went out to most Americans. These direct payments were a life support to some, while simply adding to the savings accounts of those who needed the payments less. In addition, an estimated $2 Trillion in emergency aid was provided through the C.A.R.E.S. act and other emergency stimulus (2). As this emergency package of money seemed to be air-dropped into Americans’ laps, they continued to build their savings and pay down debt, a common strategy during times of fear/uncertainty. Months down the road the consumer strengthened, and Covid-19 appeared to be another challenge that we as Americans could overcome. Vaccines came out, Americans became confident in their natural immunities post-infection, and antivirals were released. Suddenly people felt like they got their groove back. As the now healthy consumer bounced back from living under their rock, they felt comfortable spending again, and with interest rates at near record lows, they were able to stretch their dollar when they elected to finance larger purchases. This large amount of money, competing for a limited amount of goods, quickly led to inflation. Inflation increased further with record gas prices and increased labor costs, as many pushed for a higher minimum wage. A higher minimum wage generally moves the majority of wages higher. Inflation is like a natural gas leak in your home, it needs fixed immediately to not lead to a much worse explosion (within the economy). Suddenly, a Federal Reserve that approximately 15 years ago was decreasing interest rates to put the economy on a steroid, is tasked with increasing interest rates. In addition to increasing rates to slow the economy, the Federal Reserve is reducing their balance sheet. This effectively pulls money out of the economy, leading to less overall supply of money within the economy. The Federal Reserve can sell treasuries and similar units to pull money out of the economy. As monetary policy becomes more restrictive, individuals and corporations become more selective on where money is spent. This short-term (hopefully) slowing of the economy allows prices to stabilize. Jerome Powell, the Federal Reserve Chair, has voiced a commitment to do whatever it takes to control inflation and has said the bigger risk is to fail to restore price stability (3). As interest rates rise and monetary policy becomes more restrictive, the stock market is taking a step back with the S&P 500’s first 6 months of 2022 returning negative 20.58% prior to dividends (4). The last 3 years the S&P 500 has returned 31.49%, 18.40% and 28.71 respectively, for years 2019-2021 (5). Most clients want to know, “when will the pain end and what will make it end?” This answer is complex and regarded as difficult to answer, in our opinion. We remain optimistic that Jerome Powell is transparent and committed to his goal to do whatever it takes to beat inflation (6). This is far from an immediate win for the economy though, given his main tool to fight inflation is tighter monetary policy, which may involve a slowing of the economy. We feel additional optimism is drawn from the Federal Reserve being aggressive in the recent .75% interest rate increases, as opposed to a .25% increase, for example. We believe the Federal Reserve is having to be so aggressive because they were late to begin increasing rates, as they admit to some degree, they got it wrong that inflation was not just transitory (7). It is hard to determine when the pain of this bear market will end, as it seems to hinge on whether the United States will go into a recession, which hinges on if the Federal Reserve will tighten monetary policy enough to tamp down inflation without overshooting and sending the economy into unnecessary downturn. A recent Forbes article suggests bear markets historically last 449 days when they precede a recession, compared to 198 when a recession does not occur (8). In our opinion, if inflation readings can begin to show that Federal Reserve policy is having the desired effect, markets will begin to recover. Moreover, a Jerome Powell win regarding the velocity and trajectory of interest rate changes may keep the economy out of recession. We understand that market volatility naturally creates discomfort and concern. It serves as a reminder that the stock market is not a money tree, and one must maintain an understanding of volatility at times. In 2022, we aim to implement strategy regarding conversions from IRAs to Roth IRAs for clients in which it is appropriate. Additionally, we are enacting a reallocation strategy from bonds to stocks, when appropriate. Contributing during lower markets remains a key priority to getting what you deserve once stock markets recover. We see current market contributions like piers driven the deepest in the construction of a bridge. While these piers take the most effort, they in turn bear the most weight. Comparatively, it may seem difficult to continue to contribute now but these contributions stand to make the most progress once markets recover. I continue to manage each account individually and strive to put the upmost strategy and effort into getting you what you deserve. This month marks my 10th year in the industry, and I want to thank you for being a valued client of my firm. Whether I’ve been working with you for 10 years or 10 days, my goal is to make your investment experience comfortable in all market conditions. Some years my best influence on your money may be to lose less than the broad market by remaining diversified and not blindly following risks. As we are halfway through this year, only time will tell how it will end up. I’m proud to say that while some investment firms are trying to find a reason to put you into a new product, my goal is to always act in your best interests. It is with great pride to act as your fiduciary and navigate challenges together.