2023 exceeded expectations across many economic and financial market measures. The risk of a global recession was top of mind for many investors throughout the majority of the year. However, towards the end of the year, most major central banks concluded their respective hiking cycles as global economies experienced strong disinflation.  The positive signals from central bankers led to a sharp rally in financial assets across the board in the quarter.  U.S. large-cap stocks were up 11.7% and small-cap stocks were up even more at 14.0%.  U.S. growth was up 14.2% and value stocks were up 9.5%.  Foreign-developed stocks rallied 10.5% while emerging stocks were up 7.9%. Core U.S. bonds had a strong quarter, up 6.8% as U.S. Treasury yields declined. Inflation-sensitive bonds were up 4.4% and high-yield bonds finished up 7.2%.   

In this quarter's commentary, we focused on the following topics:

• A Wild and Volatile 2-Year Round Trip: U.S. stocks are basically flat over the past two years and we highlight the difference in volatility and returns for growth and value stocks. 
• Opportunities Ahead: we review the best opportunities in the financial markets in the year(s) ahead.    
• Risks in the Year(s) Ahead: we highlight some of the top risks for financial markets in the year ahead and how investors should consider risk.

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Click here to read our full commentary.