Quarterly Client Letter – 1st Quarter 2023

Capital markets around the world suffered losses in 2022.  Stocks and bonds, in the U.S. and abroad, were lower for the year.  Indeed, most “risk assets” were lower, from stocks to real estate to cryptocurrencies.  The 18% decline in the S&P 500 was the worst calendar year for the U.S. stock market since 2008. (International stocks fared relatively better, down 14%.)  For those with balanced accounts, bonds failed to offer their usual ballast, with the 10-year Treasury down 16% and the Barclays Aggregate Bond Index down 12%.  For some perspective as to how rare that is, the last time the major stock and bond indices were down in the same year was 1969. 

Looking at our portfolio performance, there were some notable bright spots.  We were aided by the relative performance of value vs. growth.  Most of our stock and bond funds outperformed their respective benchmarks.  And, as mentioned, international stocks did better than U.S. stocks.  Some of our individual investments turned in disappointing results for the year, but in the aggregate, our portfolios outperformed the market.  As we’ve written in the past, small advantages in down markets can add meaningfully to results over time.   

The culprit behind the decline in asset values last year is apparent – rising interest rates against a backdrop of higher inflation.  And the outlook for the year ahead is likely to be determined by the interest rates and inflation environment as well.

That said, looking forward, we see reasons to be optimistic.  For one thing, as interest rates rise and price-to-earnings multiples compress, expected future returns rise. Further, strictly from a historical perspective, back-to-back years with market losses are infrequent.  The S&P 500 has been down consecutive years on two occasions since World War 2: 1973-74 and 2000-02.    As for bonds, prior to 2021-22, you’d have to go back to 1958-59 to find consecutive down years.  And stocks and bonds falling together?  Well, it’s never happened in consecutive years.  So, the odds are favorable that we could enjoy better returns in 2023. 

The greatest risk to our optimism is that the planned interest rate hikes fail to curb inflation and the Fed is forced to go much higher than currently anticipated.  We think this is unlikely, as there are already signs that inflation may be easing.  We expect that inflation will peak and the Fed will signal a pause in its campaign of rate hikes.  If the economy remains strong, rates will probably stay higher for longer.  If the economy falls into recession (which, by the way, we think is the lesser of two evils vis-à-vis inflation), the Fed will probably have to start lowering rates again.  But either way, we think the end of interest rate increases and the easing of inflation will prove to be positive catalysts for the market.    

As a final note, it is worth mentioning that there were several fund distributions at the end of the year, and we were actively harvesting tax losses where appropriate to offset the tax implications of any realized capital gains or distributions.  So, you may see an above-average level of activity and higher-than-normal cash balances at year-end.  Rest assured we will be re-allocating your capital as appropriate.  And as always, please inform us of any changes to your address, phone number or email, any change of circumstances, or any necessary updates to your beneficiaries.

Eddie Carlisle     Doug Muenzenmay        Julius Ridgway

SoundPath Investment Advisors



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Sissy Moreland

Client Services Trading

A graduate of Mississippi State University, Sissy joined Medley & Brown in 2017, but her career goes all the way back to 1990 when she was the merchandise director for four years at Phi Theta Kappa. She was also Customer Service Manager and Marketing Development Manager at Crystal Springs Apparel from 1994 to 2005. From 2005 to 2017, she was Manager of Sales Administration at Skyhawke Technologies. Thanks to her considerable operations and administrative experience, Sissy oversees trading and assists with most back-office operations for the firm. Staying so busy at work requires Sissy to recharge her batteries outside the office from time to time which she does by running, reading, enjoying a leisurely brunch, and watching the Saints play football.

Beth Braswell

Client Services Coordinator

Beth spent four years in the investment world before joining Medley & Brown in 2004 as our operations coordinator. She and her husband Robbie are busy parents to identical triplet daughters, so not surprisingly, some of Beth’s favorite things to do are napping and relaxing on the beach when she actually finds the time. Beth also enjoys taking short walks to the pool, attending concerts, and going out of town for long weekends. Beth loves her Mississippi State bulldogs and currently has four dogs, three cats, and three grandcats because having three children simply isn’t enough. No wonder her operational skills are so exceptional.

Doug Muenzenmay, CFA, CFP®

Senior Advisor   |   Principal

When he’s not enjoying the outdoors or attending his children’s school and sporting events, you can find Doug studiously researching investments for his clients. His career began in 1991 after graduating from the University of Iowa with a bachelor’s degree in economics. He spent 17 years in trust investments at three different banks before joining Medley & Brown in 2010. Doug also got his MBA from Mississippi College and served as an adjunct professor in finance there from 2007 to 2013. Married to his wife Sharon since 2001, Doug is a Chartered Financial Analyst (CFA), Certified Financial Planner (CFP), and a board member of the CFA Society of Mississippi.

Eddie Carlisle, CFP®

Senior Advisor  |   Principal  |  Chief Compliance Officer

Eddie’s extensive education includes a B.S.B.A. in accounting, with special distinction, from Mississippi College in 1994, along with a J.D. from Vanderbilt University and LL.M. (Master of Laws) in taxation from the University of Florida. But it’s what he’s learned outside of school and work that really stands out. He’s an Eagle Scout, which taught him a great deal about honesty and hard work from an early age. He learned even more earning black belts in Taekwondo, Hapkido, and Hanmudo. Oh, and he studies the Korean language in his spare time as well. Additionally, Eddie serves as an adult leader for Scout Troop 164 in Madison. He is a past board member of Hope Hollow Ministries, the Central Mississippi Down Syndrome Society, and the Mississippi Corporate Counsel Association. Eddie is currently a board member of the Woodward Hines Education Foundation. He enjoys spending time with his wife, Sarah, and their three children—Andrew, Caroline, and Emma. 

Julius Ridgway

Senior Advisor   |   Principal

Judging from his background, you’d think investments and other financial matters were all Julius cares about. After all, he has two decades of direct investment experience and spent the previous ten years involved in banking and real estate. Julius also received a masters degree from the London School of Economics in 1998, an MBA from Millsaps College in 1993, and a history degree from the University of Mississippi in 1990. But his true passions include driving sports cars on racetracks or twisty mountain roads, running ultramarathons, and taking road trips with his wife and son. He’s worked here since 2002 as a Chartered Financial Analyst (CFA) and member of the CFA Institute while also serving as an adjunct instructor at Millsaps College and board member of New Stage Theatre. It takes major dedication to tackle all these responsibilities—sort of like training for all those long distant runs—but Julius enjoys every minute of the grind. And when it’s time to slow down, Julius finds the best way to clear his head is taking long hikes in the mountains on all those road trips.