The Weekly Wealth of Knowledge is your download of this week's most important topics related to our community, financial planning, the markets and more! December is "small business" month at MONECO. All month long we will be highlighting ways we can all support small businesses within our local communities this holiday season and beyond. We would also like to take this time to wish all of you and your families a safe & happy holiday season!
In this issue:
- MONECO Insights - Small Business Growth (3 min read)
Team MONECO - Always Be Giving (2 min read)
- A November To Remember (3 min read)
Small Business Growth
This week our Insights team takes a look at small business growth and expansion. In order to grow as a business or in any capacity you need to have a good foundation to build upon. Determining what makes you unique and what your business brings to the table is a critical first step. As you read, you will gain some knowledgeable insights on how to do just that. As always if we can help in any way, do not hesitate to reach out!
Team MONECO - Always Be Giving
Team MONECO and clients donated unwrapped toys once again this year to benefit the Fairfield Police Department's Annual Toy Drive. These toys will be distributed by the department specifically to those in need within Fairfield County. It is a strong commitment that the firm makes not just during the holidays, but all year round, to always be giving back to the community that we have been so fortunate to operate in for over 40 years. Pictured below is some of the team with just a small sampling of what was contributed, along with Chief Robert Kalamaras (far right) and Captain Tony Granata (far left).
A November To Remember
Solid gains for both stocks and bonds gave investors a November to remember. As financial markets continue to defy skeptics, we're reminded of a quote from Warren Buffett’s long-time partner and one of the greatest investors of our time, Charlie Munger, who passed away last week. “The world is full of foolish gamblers, and they will not do as well as the patient investors.” We couldn’t agree more. Patient investors have been rewarded in 2023 and will continue to be.
Increasing confidence in a soft landing for the U.S. economy has shifted the focus away from rate hikes and toward eventual cuts, helping to pull long-term interest rates down and encouraging market participants to pay higher prices for stocks relative to expected earnings.
A good start to holiday shopping season supports the soft landing narrative. Online sales since Black Friday are up 5% over the same period last year according to Adobe. Lower prices at the pump, falling goods prices, higher stock values, and rising wages should help keep the momentum going.
The other key piece of the soft-landing equation, inflation, is well on its way to the Federal Reserve’s 2% target. Remarkably, the preferred inflation measure, the core personal consumption expenditures (PCE) deflator, rose at just a 2.2% annualized pace over the past three months, down from 5.3% in the year prior.
Looking ahead, we think the combination of corporate America’s solid fundamental foundation and the support from lower interest rates sets the stage for more stock gains in the coming year. The slowing economy will help ease inflation. Less inflation will help promote interest-rate stability. And earnings are entering their sweet spot following an excellent third quarter earnings season.
Sure there are risks. Some of the impact of higher rates is yet to come. Consumers have drawn down most of their excess savings. U.S. government debt is getting more expensive. Wars overseas have heightened geopolitical risk ahead of what will likely be a divisive 2024 U.S. presidential election.
But as Mr. Munger told us, patience will be rewarded. No one knows exactly what will happen through the end of the year, but history shows that stocks tend to produce above-average gains in December and rise much more often than they fall—even after strong gains the month prior. This would be a fitting end to what’s truly been a remarkable year.
Please reach out to us if you have any questions.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.
References to markets, asset classes, and sectors are generally regarding the corresponding market index. Indexes are unmanaged statistical composites and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.
All data is provided as of December 5, 2023.
Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities.
All index data from FactSet.
The Standard & Poor’s 500 Index (S&P500) is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
This Research material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
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