We hope you enjoy the first of what will become regular market updates from Oak Wealth Advisors. We intend to share market insights and our views about the investments we are making for you. Please share your feedback with us so that we can deliver information that you find helpful.
Hello, I’m Ryan McGuire, senior consultant at Oak Wealth Advisors. I’m excited to share our April 2023 market update with you.
As of the end of April, all major investment indices have posted positive returns for 2023, following a poor 2022 for all asset classes, and the continued turbulence created by a few high of profile bank failures.
The international developed stock index leads the pack with an impressive 11.4% total return, closely followed by US large cap stocks at 9.2% of the its encouraging to see bonds back in positive territory with the US aggregate bond market returning a solid 3.6% so far this year.
The recent time period has seen international developed stocks return to favor. We feel international markets still play a crucial role in a diversified stock portfolio.
US companies currently represent around 60% of the world’s market weight. As you can see from these charts from JP Morgan, based on expected earnings, over the next year, the international developed stock market index is still trading at a larger than average discount to the S&P 500.
And international dividend yields are expected to be higher than the US over the next 12 months. Shifting our focus to the US economy, the normalization of the supply chain post COVID and rapid increases in the target federal funds rate have helped curb inflation with the annual rate dipping below 5%
in the recent quarter. Ideally inflation will continue to decline allowing the Fed to pause rate hikes and eventually lower rates to support economic growth.
Any with a quick note on bonds 2022 was by far the worst year on record for the aggregate bond markets.
Moving forward over the next few years, the climate for bonds should be much friendlier in a stable or declining rate environment.
It is a good reminder to note that bond returns have been positive for 42 of the 47 calendar years and the history of the Bloomberg aggregate bond index.
We hope you enjoyed this brief update. Take care.