Broker Check

Third Quarter 2023 Update

October 09, 2023

It was almost four years in the making; but the big transition to Charles Schwab from the TD Ameritrade platform was completed over Labor Day weekend (Charles Schwab purchased TD Ameritrade in 2019).  They put a lot of thought and dollars into ensuring this move went as smoothly as possible. From our end, we did a tremendous amount of preparation to ensure our clients experience was as satisfactory as possible, and it paid off. It was a massive operation moving over 7,000 businesses like ours and their 3.6 million investor accounts worth $1.3 trillion in assets over to Schwab in one weekend. We are still working on some minor issues, but all in all it was a successful move.

 What will be different?

1. You will receive two statements for the month of September. One from each custodian.

2. When it comes to 2023 tax time, we will provide you with a 1099 from each custodian.

3. We will make sure everyone’s 2023 Required Minimum Distributions from their IRA’s if required were fulfilled.

4. If you had online access at TD, you should be set up at Schwab by now.

 Quarterly Performance for both stocks and bonds was negative

 After a strong first half to 2023, global equity markets declined in the third quarter with the S&P 500 losing -3.27%. Stock gains have remained unusually narrow this year, with the largest stocks in the index accounting for most of the year-to-date returns of the S&P 500. Further illustrating the market-cap effect, the equal-weighted S&P 500 index is roughly flat this year through September. Interesting note: 2023 marks the fourth consecutive year that the stock market finished lower.

 Moving to the fixed-income market, core bonds (Bloomberg U.S. Aggregate Bond Index) fell -3.2% in the quarter as interest-rates rose and remain down -1.2% year-to-date. The benchmark 10-year Treasury yield climbed nearly 70bps in the quarter, ending the period with a 4.59% yield, the highest level since 2007.

 Where are we headed?

Potential war in the middle east along with interest rates recently continuing to rise has given market participants some more negative news to ponder. We believe that this narrative will likely allow us to take advantage of opportunities as they present themselves in both stocks and bonds. We expect that the jobs picture will remain robust, earnings will be stronger, and that inflation will continue to fall and allow the Fed to stop raising rates relatively soon, thus allowing bonds to rally.

 If you have any questions, please feel free to reach out to your relationship manager.