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Moore Financial Solutions 3rd Quarter 2024

October 1, 2024

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

Did you know? Moore Financial Solutions offers unique/custom-built insurance solutions. Does anything keep you up at night that we could help fix? If so give us a call and we’ll help find you the best policy rates and options as we shop the open market of providers, all while offering our zero-pressure sales process. This includes Life Insurance, Disability Income Insurance, and Long-Term Care Insurance. Let’s review your policy and search for Moore Solutions today!

This material has been prepared for information and educational purposes and should not be construed as a solicitation for the purchase or sale

of any investment. The content is developed from sources believed to be reliable. This information is not intended to be investment, legal or

tax advice. Investing involves risk, including the loss of principal. No investment strategy can guarantee a profit or protect against loss in a

period of declining values. Past performance may not be used to predict future results. Investment advisory services offered by duly registered

individuals on behalf of CreativeOne Wealth, LLC a Registered Investment Adviser. CreativeOne Wealth, LLC and Moore Financial Solutions

are unaffiliated entities. Licensed Insurance Professional. Insurance product guarantees are backed by the financial strength and claims-paying

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Moore Financial Solutions 4th Quarter 2024

By Tyler Moore • January 23, 2025

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.

Moore Financial Solutions 2nd Quarter 2024

By Tyler Moore • July 19, 2024

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.

913.731.9105 | TMoore@TMooreFS.com

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