April 2023 Insights for Investors 

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By Maurice Stouse, Financial

Advisor and Branch Manager Should investing be about fear or should it be about optimism?

And which is the greater motivator of behavior and action? We have often heard that perception without any confirmation indeed becomes reality. Investors are bombarded almost daily with messages of fear. As a result some may give up hope at the worst possible time and change their course of action or their plan. We are reminded of the coach and his or her team sticking to their game plan even if they are down early on in the game. What if however it is not early in the game, rather its midway or towards the end? We think, once an investor reviews objective, risk tolerance and time frame, then they compare that with their current strategy and make changes as needed or wanted.

Investors can become overly worried when one talking head after another speaks about capitulation and that things will go from bad to worse. We think it fair to point out that often the talking head may be the type of professional investor, a hedge fund manager for example, that often can profit in up and down markets and that it is the very volatility they speak to that creates opportunity (with extraordinary risk) for them.

We believe that the individual investor should focus on the greater picture, the entire game, not just a particular slice of it. We look at the long-term returns and see that stocks are one of the higher returning investments, over time. Over time.

Diversification is critical as well. Bonds can play a part in diversifying a portfolio or perhaps generating income. It is challenging for many to find a timing strategy that outperforms a well thought out buy, hold and adjust as needed strategy.

Many in the media speak of anything but optimism. Some might easily draw the conclusion that it is over and that it is reconciliation time with the financial history of this nation. We don’t understand how you can explain away that there is an entire generation (much greater in size) that is following the baby boomers. They are growing their careers, their family, and living their lives. That might help explain why despite 9 straight interest rate hikes that there is still a housing shortage. And there is a worker shortage. Demand is growing or is resilient.

Affluence and standard of living have never been greater. Innovation and competitiveness continue to fuel the engine for America and the world. If a more optimistic, longterm view makes sense, we think investors can build toward and achieve their goals.

As investors contemplate their needs and objectives, we add that we believe that a portfolio should be diversified by security selection as well as asset class and that time frame, risk tolerance, tax status and ultimate objective should be the guiding light in a well-balanced portfolio.

There are special risks associated with investing with bonds such as interest rate risk, market risk, call risk, prepayment risk, credit risk, reinvestment risk, and unique tax consequences.

Investments in municipal securities may not be appropriate for all investors, particularly those who do not stand to benefit from the tax status of the investment. Municipal bond interest is not subject to federal income tax but may be subject to AMT, state or local taxes. U.S. government bonds and Treasuries are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. CDs are insured by the FDIC and offer a fixed rate of return, whereas the return and principal value of investment securities fluctuate with changes in market conditions. An investment in a money market fund is neither insured nor guaranteed by the FDIC or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. A fixed annuity is a long-term, tax-deferred insurance contract designed for retirement. Fixed annuities have limitations. If you decide to take your money out early, you may face fees called surrender charges. Plus, if you’re not yet 59½, you may also have to pay an additional 10% tax penalty on top of ordinary income taxes. You should also know that a fixed annuity contains guarantees and protections that are subject to the issuing insurance company’s ability to pay for them. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Inclusion of this index is for illustrative purposes only. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Diversification and asset allocation does not ensure a profit or protect against a loss. Holding investments for the long term does not ensure a profitable outcome.

Maurice Stouse is a Financial Advisor and the branch manager of The First Wealth Management/ Raymond James. Main office located at The First Bank, 2000 98 Palms Blvd, Destin, FL 32451. Phone 850.654.8124. Raymond James advisors do not offer tax advice. Please see your tax professionals. Email: Maurice.stouse@raymondjames.com.

Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC, and are not insured by bank insurance, the FDIC or any other government agency, are not deposits or obligations of the bank, are not guaranteed by the bank, and are subject to risks, including the possible loss of principal. Investment Advisory Services are offered through Raymond James Financial Services Advisors, Inc. First Florida Wealth Group and First Florida Bank are not registered broker/dealers and are independent of Raymond James Financial Services.

Views expressed are the current opinion of the author and are subject to change without notice. Information provided is general in nature and is not a complete statement of all information necessary for making an investment decision and is not a recommendation or a solicitation to buy or sell any security. Past performance is not indicative of future results.

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