“Who’s Driving?” – Nvest Nsights Q1 ’23 Newsletter

We are encouraged by the beginning of Spring weather, and hope this note finds you the same.  For investors, both stocks and bonds finished the 1Q with gains, but it was anything but easy.  Stocks vaulted higher in January on renewed hope from investors that the Fed just might stick the proverbial ‘soft landing’ for the economy and be able to end its rate hiking campaign.  But in February economic data remained just too-hot and was again viewed as “bad”, counter to the idea the Fed could stop or even slow its tightening, sending the markets quickly back down.  As the bond market quickly priced-in additional rate hikes to come from the Fed, two “weak-link” banks broke in early March and ushered in several weeks of fear about the viability of the global banking system.  Quick steps taken by policy makers seemed to calm those worries and permitted stocks to claw back into the black by month-end.

But where do we go from here, and what should investors make of recent market performance and confusing sector leadership?  This quarter we offer the following brief articles:

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Are My Assets Safe?

Nvest, since its inception, has utilized the brokerage and custody services of Charles Schwab & Co.  We consider Schwab to be the industry leader based on its history, low fees, and industry leading technology; it is also long considered one of the most conservatively managed asset custodians in the industry.  While the entire industry continues to undergo significant changes via consolidation and expanding access to investing via cost reductions (advocating for no-load mutual funds, elimination of trading commissions, account maintenance fees, and more), Schwab’s commitment to client security and financial stability remains unchanged. For example, Schwab avoids underwriting new securities issuance, does not hold or permit direct investing in risky or highly speculative assets (such as cryptocurrency), and remains highly protective of client assets.

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