2023 Q2 In Review - Integrity Wealth Advisors, Ventura & Ojai, California

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TOTAL RETURN 2023 Q2 + NEWSWORTHY EVENTS April 2 – OPEC+ announced that they were cutting daily petroleum output by 1.16 million barrels per day April 20 – SpaceX's Starship rocket, the largest and most powerful rocket ever built, is launched during a flight test from a base in Boca Chica, Texas, exploding four minutes after launch May 1 – San Francisco-based First Republic Bank fails and is auctioned off by the US FDIC to JPMorgan Chase for $10.7 billion May 6 – The coronation of Charles III and Camilla as King and Queen of the United Kingdom and the other Commonwealth realms is held in Westminster Abbey, London June 2 – Congress approves deal raising debt ceiling, averting U.S. default June 14 – The Federal Reserve took a pause on hiking rates for the first time in more than a year, as inflation continues to slow and the economy shows signs of easing June 18 – All five crew members of Titan, a deepsea submersible exploring the wreck of the Titanic, are killed following a catastrophic implosion of the vessel June 23 – The Wagner Group begins an armed conflict with the Russian military, seizing the city of Rostovon-Don and portions of the Voronezh Oblast before withdrawing the next day, after a peace agreement brokered by Belarusian President Alexander Lukashenko 9% S&P 500 TOTAL RETURN MSCI ACWI EX USA TOTAL RETURN BARCLAYS US AGGREGATE TOTAL RETURN 8.74% 8% 7% 6% 5% 4% 3% 2.67% 2% 1% 0% -1% -1.25% -2% April May June As of close 6/30/2023 12% S&P 500 TOTAL RETURN MSCI ACWI EX USA TOTAL RETURN BARCLAYS US AGGREGATE TOTAL RETURN Source: https://en.wikipedia.org/wiki/2023 11% 10.42%
THE NEW REALITY FOR INVESTORS 2023 Q2 IN REVIEW As we approach the midway point of 2023, it is evident that we are facing significant uncertainty and a landscape of change. We find ourselves amidst a period of transition in the global economy, financial markets, and various sectors. The market, once characterized by a binary nature, has now become more balanced. In the past, investors could concentrate solely on a select few internet-related behemoths, disregarding everything else. They could borrow money at near-zero interest rates without concern for the consequences of such easy access to capital, the looming threat of inflation, or the potential for central banks to raise interest rates. However, times have changed, and this shift brings positive news for investors. The market no longer moves exclusively in a single direction, which creates a more compelling and diverse environment. The range of opportunities has expanded to encompass both American and international companies, growth stocks and value stocks, the technology sector and healthcare, industrials and energy, short-term and long-term bonds, as well as treasuries and corporate bonds. We now reside in a world where diligent investors can identify both cyclical and secular opportunities, but this necessitates conducting thorough research. It’s important to note, we are also searching for opportunities where the baby has been thrown out with the bathwater — that is, companies left humbled by the selloff of 2022, but still worth our attention because business models remain intact, earnings are holding up and the potential for stock price appreciation remains strong. Throughout this year, we have witnessed impressive comebacks from technology and consumer sector companies. It is essential to recognize that risks have also grown. These risks encompass not only market and economic factors but also policy-related concerns. Questions arise regarding the relationship between the United States and China, the potential escalation of the conflict in Ukraine, and the regulatory response to the banking sector's crisis of confidence. All these factors must be carefully considered when evaluating potential investments. Furthermore, as investors, we must be prepared to endure short-term discomfort for long-term benefits. Undeniably, the present moment presents a great opportunity for active investors. It has become increasingly crucial to search for investment prospects on a global scale while remaining vigilant regarding growing risks in the market, economy, and the world at large. Given the prevailing uncertainty, a considerable amount of cash is currently sitting on the sidelines. This may indeed be an opportune time to contemplate deploying those funds into the market. ECONOMIC CHARTS & NOTES CONSUMER SENTIMENT Consumer sentiment is up 28% from last year's historic low, which could bode well for spending in the months ahead. Retail sales have picked up the last couple months but continue to be hampered by inflation. EMPLOYMENT The U.S. unemployment rate has ticked up to 3.7% but remains historically low. Nonfarm payrolls increased much more than expected in May led by strong job creation in professional and business services. US Retail Sales Consumer Sentiment Unemployment Rate NonFarm Payroll 34% 100 16% 2200 US Retail Sales % Chg 28% 22% 16% 10% 4% -2% -8% 90 80 70 60 Consumer Sentiment Unemployment Rate % 14% 12% 10% 8% 6% 4% -825 -3850 -6875 -9900 -12925 -15950 -18975 NonFarm Payroll -14% Jan '19 Jul '19 Jan '20 Jul '20 Jan '21 Jul '21 Jan '22 Jul '22 Jan '23 50 2% Jan ' 19 Jul '19 Jan '20 Jul '20 Jan '21 Jul '21 Jan '22 Jul '22 Jan '23 -22000 Source: University of Michigan Consumer Sentiment. Retail Sales - U.S. Census Bureau. Source: U.S. Bureau of Labor Statistics
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Page 5 and 6: Inflation has eased as rate-hiking
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Page 9 and 10: INVESTMENT COMMITTEE 2023 Q2 IN REV
Page 11 and 12: STEP 3: PAY DOWN NON-DEDUCTIBLE HIG

2023 Q2 In Review - Integrity Wealth Advisors, Ventura & Ojai, California

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