Fall 2023 Investor Letter: A Pause

Insights | Fall 2023 Investor Letter: A Pause
Fall 2023 Investor Letter Cover

Author: David I. Templeton, CFA, Principal and Portfolio Manager

The third quarter market performance started strong as companies reported stronger second quarter earnings due to subsiding input costs. Year-over-year margin growth was above the 20-year average, making it the largest contributor to earnings growth. As the quarter progressed though, the market took a breather in August and September resulting in small declines across many indices in the quarter as discussed in the Investor Letter. Longer maturity bonds continued to show weakness, not unlike in 2022, partially in reaction to stronger economic data.

As we noted last quarter, many forecasters were calling for a recession by the middle of this year; however, now many strategists are moving away from the recession call. When everyone moves to one side of the boat, increased attention is necessary. With an improved earnings outlook, as noted earlier, and looking back historically, a negative 3rd quarter tends to lead to a positive comeback for the market as the year comes to an end as we highlight in our Investor Letter.

More of our thoughts on the quarter and expectations for the second half of the year are discussed in more detail in our Fall 2023 Investor Letter.

HORAN Capital Advisors, LLC is an SEC registered investment advisor. The information herein has been obtained from sources believed to be reliable but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results. Market conditions can vary widely over time and there is always the potential of losing money when investing in securities. HCA and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only and is not intended to provide and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.