WESCAP Q3 2024 Quarterly Commentary: Fed Rate Cuts and Global Growth

Portfolio results for the third quarter of 2024 were generally strong.  The Federal Reserve cut interest rates by 0.5%, which was more than expected.  Likewise, longer-term interest rates also declined.  This helped asset pricing for longer-term fixed income assets and boosted most global stock prices, especially those that are more economically sensitive. 

Outsmart the Dealership: Save on Your Next Car

At WESCAP, we’re always interested in the best way to approach a market.  This isn’t limited to financial assets.  So today we’re going to talk about how to get the best price on a new car.

WESCAP Q2 2024 Quarterly Commentary

The portfolio results for the second quarter of 2024 were mixed. Treasury bonds decreased by approximately 2.2% as interest rates rose, negatively impacting many asset classes, though not all.

AI (ChatGPT): Financial Wizard or Wishful Thinking?

At WESCAP, we have been using and testing ChatGPT 4.0 for some time.

Chat GPT 4 is fast and has vast amounts of data and information available to it.  It can write spreadsheet formulas, do various math calculations.  It can understand conversations and create well-written responses.  It has aced legal bar exams and similar difficult tests that far exceed the average person’s ability to do so. 

It and other similar large language models use a deep-learning neural network model.  When asked about its own drawbacks and limitations, here is how ChatGPT responded:

WESCAP Q1 2024 Quarterly Commentary: Positive Stock Returns, High Interest Rates, and Recession Fears

Portfolio results for the first quarter of 2024 were generally positive for global stocks.  For the quarter, the S&P 500, Russell 2000 (smaller U.S. firms), EAFE index (foreign stocks), and MSCI emerging markets stocks returned +10.6%, +5.2%, +5.8%, and +2.4%, respectively.  Most foreign currencies depreciated over the quarter, which accounts for much of the lower returns of foreign based assets. Nevertheless, this helps foreign companies gain future market share over their U.S. counterparts.  The EAFE (foreign stocks) currency-hedged index returned 10.5% for the quarter, close to matching the S&P 500.  Many WESCAP-selected foreign stock funds employ currency hedging, which proved to be of value the last quarter and for the last few years.