The November 2023 Monthly desk calendar for 2023 year with alarm clock on blue wooden background.

Newsletter December 19, 2023

History in November

The holiday season is officially upon us, and with it comes our annual opportunity to gather family and friends and share joy with those we love. It also provides a great opportunity to share stories of the past year and look back at some memorable snapshots and historic moments of the past twelve months.

In the financial markets, the month of November was analogous to one of those memorable candid snapshots. November didn’t provide any dramatic newsworthy events to anchor in our memory: No great advance in treating a life-threatening human condition, no peaceful ending to a worrisome military conflict, no global economic boom. In fact, earlier this Fall many market pundits had been downright pessimistic about the impact that lingering inflation, falling commercial real estate prices, and a host of other concerns might have on the global stock market.

But yet, in the face of that pessimism and without an obvious catalyst, the global stock market turned in one of its most impressive months in history. The 9.3% return achieved by the market in November was the best monthly return since 2020¹ and ranked in the top 3% of the 1,175 months of market history going back to 1926¹.

What was more surprising to many investors in the month of November was that the US bond market gave us a surprise that one-upped the stock markets. At the end of October, the US bond market had suffered through its worst three-year period history, falling over 15% during that time¹. But investors betting on a continued decline in bond prices were surprised to see the bond market quickly reverse and post a 4.6% return in November, its best month since “Back to the Future” hit the theaters and “The Cosby Show” ruled the TV ratings¹. In fact, November’s bond market performance was the 8th best monthly return in the past 1,175 months¹.

While some pessimists might try to downplay November’s returns as just a meaningless one-month blip in a downward trend, the long-term impact on an investor who chose to be out of the market, and thus missed the significant one-month returns described above, could be quite dramatic. For example, a hypothetical investor who chose the comfort of their savings account over a 60/40 portfolio of stock and bonds didn’t just miss out on the unusually strong returns that the market provided in November. The opportunity cost of missing just those 31 days, when compounded over a multi-year or multi-decade time horizon, could potentially double or triple the initial amount of that lost opportunity.

As we embark on a new year, we can draw from experiences from the past which tells us to be prepared for life’s unpredictability and be prepared to recognize and appreciate once-in-a-generation moments. Staying fully invested in markets, even when recent results have been disappointing and the news seems bleak, can do the same thing for your wealth.

Note: Throughout this document, the Global Stock Market refers to the following blend on indexes: CRSP 1-10 US Market from 1926-1969, M¬SCI World from 1970-1987 and MSCI All-Country World from 1988-present. The US Bond Market refers to the following blend of indexes: US 5-Year Treasury from 1926-1972, Bloomberg US Govt/Credit Bond Index from 1973-1975, and Bloomberg US Aggregate Bond Index from 1976-present. Indexes are not available for investment and do not take into consideration fees and expenses.

¹Data Source: Dimensional Returns

TFO Wealth Partners (“TFO”) is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.

This communication is intended to be informational in nature and is not intended to be construed as individualized financial advice or a specific recommendation. All expressions of opinion are subject to change and should not be construed as an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned. We believe this information provided is reliable, but do not warrant its accuracy or completeness. It is provided for informational purposes only and should not be construed as legal or tax advice. TFO is not in the practice of law.

Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment or strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s portfolio. There are no assurances that a portfolio will match or outperform any particular benchmark.

Certain information herein has been obtained from third party sources and, although believed to be reliable, has not been independently verified and its accuracy or completeness cannot be guaranteed. No representation is made with respect to the accuracy, completeness or timeliness of this document.

This document may contain forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio’s operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of TFO or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made.

179bWP – 2023.12

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