Broker Check


March 31, 2023

First Quarter Market Summary

The first quarter of 2023 was highlighted by the collapse of Silicon Valley Bank.  Although it caused some short-term market volatility in March, it did not prevent markets from posting nice returns to start the year.  The Fed continued to raise rates during the quarter, increasing the Fed Funds rate twice. 

US stocks gained 7.3% during the quarter, shrugging off the stress in the financial sector.  Growth stocks rebounded from their dismal 2022 and outperformed value stocks for the quarter by over 13%. 

International stocks also posted strong first quarter returns.  Developed international stocks were up 8.5%, outperforming US stocks, while emerging market stocks were up just 4.0%. International stocks continue to look attractive from a relative valuation standpoint vs. US stocks.  Over the previous 1-year ending March 31, 2023, international stocks were down 5.1%, while US stocks were down 8.6%. 

The 10-year Treasury yield fell to end the quarter at 3.5%.  The yield curve remains inverted with short-term rates significantly higher than longer-term rates. 

 Below is a table highlighting various market index returns over the past 3, 12, and 36 months:


As you may have noticed, bonds are once again providing an attractive yield and may offer the downside protection investors are accustomed to in the event of a stock market decline. 

 In 2022, we saw both stocks and bonds decline double digits, which was alarming for many investors.  Typically, the diversification benefits of having stocks and bonds in your portfolio provide an effective way to mitigate risks.  The below periodic table of asset class returns shows that a diversified asset allocation portfolio has delivered a smoother ride with good returns over time.  With the end of the Fed’s rate tightening in sight and easing inflation, bonds should be bonds again and provide the ballast to portfolio returns. 

Inflation is still top of mind of many investors and we continue to get questions about protecting portfolios against long-term inflation.  Even though stocks may struggle in the short-term when inflation increases, stocks have shown that they are a hedge against long-term inflation.  Over time, the stock market has consistently outperformed inflation, providing investors with real returns that protect against the rising cost of living. 

As seen above, inflation now seems to be on a sustained downward track.  Even though inflation may not be falling as fast as the Fed would like to see, it is certainly headed to more sustainable levels that should allow the Fed to be more flexible than it has been in the past year.  Easing labor markets and consumer demand should allow inflation to return to more normal levels overtime. 

We continue to believe that a well-diversified portfolio, with a mix of stocks and bonds, is the best approach for long-term investors.  While diversification may not always work in the short-term, it remains an effective way to manage risks and achieve your financial goals.  As always, we are here to help you navigate these complex market conditions and make informed decisions about your investments. 

Thank you for your continued trust and confidence. 


Firm News

We are pleased to announce that Tammy Elms has rejoined HWA Financial Group.  Tammy will be resuming her old role and will be responsible for all aspects of client service.  She can be reached at 



JR Geld, CFA, CFP®                                                                        HWA Financial Group                                                           3448 Ellicott Center Dr., STE 101

                                                                                                           Ellicott City, MD  21043

Philip E. Huber, Jr, CPA, CFP®                                                      410-696-4025