Copy of the 1st Quarter Review Letter

KERR FINANCIAL GROUP

KILDARE ASSET MANAGEMENT

45 Lewis Street, Lackawanna RR Station

Binghamton, NY? 13901

Phone: 607-231-6330????????????????????????????????????????? ????email: [email protected]

The following is a copy of the 2024 1st quarter letter sent to clients. It reviews the markets and the client account’s activity and performance for the 1st?quarter of 2024.

June 7, 2024

Conformity and cultural peer pressure can be strong forces.? The need to fit in can play a big role in our thoughts and actions.? Although we all like to stand out and be a little unique, there are social pressures to “fit in”.? Being a rebel might sound cool, but the reality is that being too different risks exclusion.???

Seemingly distinct from this, the investment industry has a reputation of sophistication and independence.? They have comprehensive research departments, vast computing power, and there is intense competition to outperform.? Also, Wall Street has a long history of famous personalities that seem to swim against the current.? Recently, however, there are some developments that point to group thinking among investors.

In 2023, the “Magnificent 7” was a label given to seven popular growth stocks that became so widely held that they dominated the stock market performance.? Without these stocks, investment performance lagged.? Fundamentals and valuations did not matter, the Mag 7 had to be owned.?

Another example of unquestioned consensus agreement involves the expectations on monetary policy and interest rates decisions in 2024.? At the beginning of the year, the almost universal forecast was for 5 or 6 Federal Reserve interest rate cuts during the year.? There were some skeptics, but they were mostly disregarded.? ?

Interest rate cuts became an elixir for the markets.? The financial media was full of articles and interviews about how many, their timing, and when they would begin.? If any news or data conflicted this interest rate cut narrative, it was immediately dismissed.?

As popular as this belief was, there were numerous reasons to question this story line.? The financial landscape was full of data points and forecasts that, under normal circumstances, would not have had the Fed cutting interest rates.? Nevertheless, Wall Street’s confidence in lower interest rates remained high.

GDP was expected to rise which pointed to an expanding economy.? The forecasts for corporate earnings were for reasonable growth.? Many components (housing, food, commodities) of the inflation calculations were not predicted to decline.? The jobs market remained strong, keeping the unemployment rate low.? All these items opposing cutting interest rates were disregarded as Fed chairman Powell had signaled cuts were coming.? ?

Throughout the 1st quarter the economic numbers pointed to growth and continued inflation.? This pushed the number of predicted rate cuts down and shifted the timing of those cuts to later in the year.? The market adjustments to this were mainly within the fixed-income market.? Bonds sold off as interest rates moved higher.? The stock market was unphased as traders kept believing that lower interest rates were coming.?

The stock market gradually moved higher.? Once again, much like 2023, the leadership was concentrated in a small number of stocks led by Nvidia.? Large growth companies were strong while small cap stocks lagged.? The Russell 2000 (the small cap index) is still well below its 2021 high.? Here are the major indexes’ performance for the 1st quarter.

Using a size weighted average, here is how the average Kildare Asset Management – Kerr Financial Group’s client account performed. This is calculated after all fees and expenses.

??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? 1st Qtr.

Kerr Financial Group – Kildare Asset Management:?????????????? 1.82%??????????????? ??????????????????????????????? ???????????????

Please contact me with questions or comments.? As always, thank you for your support and confidence in Kerr Financial Group.??????