Page 20 - ISO April 2023

APRIL 2023

DISCLOSURE
All expressions of opinion reflect the judgment of the author, the Investment Strategy Committee, or the Chief Investment Office and are subject to change. Past performance
may not be indicative of future results. There is no assurance any of the trends mentioned will continue or forecasts will occur. The performance mentioned does not include
fees and charges which would reduce an investor’s return. Dividends are not guaranteed and will fluctuate. Investing involves risk including the possible loss of capital. Asset
allocation and diversification do not guarantee a profit nor protect against loss. Investing in certain sectors may involve additional risks and may not be appropriate for all
investors.
International investing involves special risks, including currency fluctuations, different financial accounting standards, and possible political and economic volatility.
Investing in emerging and frontier markets can be riskier than investing in well-established foreign markets.
Investing in small- and mid-cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor.
There is an inverse relationship between interest rate movements and fixed income prices. Generally, when interest rates rise, fixed income prices fall and when interest rates
fall, fixed income prices rise.
US government bonds and Treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. US gov-
ernment bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term
obligations of the US government.
While interest on municipal bonds is generally exempt from federal income tax, they may be subject to the federal alternative minimum tax, or state or local taxes. In addition,
certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal
bonds may be subject to capital gains taxes if sold or redeemed at a profit.
If bonds are sold prior to maturity, the proceeds may be more or less than original cost. A credit rating of a security is not a recommendation to buy, sell or hold securities
and may be subject to review, revisions, suspension, reduction or withdrawal at any time by the assigning rating agency.
Commodities and currencies are generally considered speculative because of the significant potential for investment loss. They are volatile investments and should only
form a small part of a diversified portfolio. Markets for precious metals and other commodities are likely to be volatile and there may be sharp price fluctuations even during
periods when prices overall are rising.
Investing in REITs can be subject to declines in the value of real estate. Economic conditions, property taxes, tax laws and interest rates all present potential risks to real estate
investments.
High-yield bonds are not suitable for all investors. The risk of default may increase due to changes in the issuer’s credit quality. Price changes may occur due to changes in
interest rates and the liquidity of the bond. When appropriate, these bonds should only comprise a modest portion of your portfolio.
Beta compares volatility of a security with an index. Alpha is a measure of performance on a risk-adjusted basis.
The process of rebalancing may result in tax consequences.
Alternative investments involve specific risks that may be greater than those associated with traditional investments and may be offered only to clients who meet specific
suitability requirements, including minimum net worth tests. Investors should consider the special risks with alternative investments including limited liquidity, tax consid-
erations, incentive fee structures, potentially speculative investment strategies, and different regulatory and reporting requirements. Investors should only invest in hedge
funds, managed futures, distressed credit or other similar strategies if they do not require a liquid investment and can bear the risk of substantial losses. There can be no
assurance that any investment will meet its performance objectives or that substantial losses will be avoided.
The companies engaged in business related to a specific sector are subject to fierce competition and their products and services may be subject to rapid obsolescence.
The indexes mentioned are unmanaged and an investment cannot be made directly into them. The Dow Jones Industrial Average is an unmanaged index of 30 widely held
securities. The NASDAQ Composite Index is an unmanaged index of all stocks traded on the NASDAQ over-the-counter market. The S&P 500 is an unmanaged index of 500 widely
held securities. The Bloomberg Barclays U.S. Aggregate Bond Index contains approximately 8,200 fixed income issues and represents 43% of the total U.S. bond market.
The VIX is the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market’s expectation of 30-day volatility. The JP Morgan Emerging Market Bond
Index tracks U.S. dollar denominated Brady bonds, loans and Eurobonds.

END NOTES
Labour Force Participation: Where Did the Workers Go?
1 “The COVID Retirement Boom,” by Miguel Faria-e-Castro, Economic 5 “Declining labor force participation and its implications for unemployment and
Synopses, 2021, No. 25, Federal Reserve Bank of St. Louis, The employment growth,” Daniel Aaronson, Luojia Hu, Arian Seifoddini, and Daniel G.
COVID Retirement Boom | St. Louis Fed (stlouisfed.org) Sullivan, Federal Reserve Bank of Chicago, Economic Perspectives, 4Q/2014, https://
www.chicagofed.org/publications/economic-perspectives/2014/4q-aaronson-etal
2 “How Much is Long COVID Reducing Labor Force Participation? Not Much (So Far),”
by Louise Sheiner and Nashiha Salwati, Hutchins Center Working Paper # 80, https:// 6 “The Effects of the ‘Great Resignation’ on Labor Market Slack and Inflation,”
www.brookings.edu/wp-content/uploads/2022/10/WP80-Sheiner-Salwati_10.27. by Renato Faccini, Leonardo Melosi, Russell Miles, Chicago Fed Letter, No. 465,
pdf February 2022,
https://www.chicagofed.org/publications/chicago-fed-letter/2022/465
3 “New data shows long COVID is keeping as many as 4 million people out of
work,” by Katie Bach, August 24, 2022, The Brookings Institution, https://www. 7 “The Labor Market May be Tighter than the Level of Employment Suggests,” by
brookings.edu/research/new-data-shows-long-COVID-is-keeping-as-many-as- Robert S. Kaplan, Tyler Atkinson, Jim Dolmas, Marc P. Giannoni and Karel Martens,
4-million-people-out-of-work/ May 27, 2021, in Dallas Fed Economics, https://www.dallasfed.org/research/
economics/2021/0527
4 “Why Are Workers Staying Out of the US Labor Force?,” by Victoria Gregory, Joel
Steinberg, February 02, 2022, the Federal Reserve Bank of St. Louis, https://
www.stlouisfed.org/publications/regional-economist/2022/feb/why-workers-
staying-out-us-labor-force

20