Page 3 - ISQ July 2022

INVESTMENT STRATEGY QUARTERLY

With strong state finances and favourable supply dynamics resilient US economy, with less direct ties to the Ukraine
expected this summer, municipal bonds are also compelling. conflict, is extending the reign of US equities over other, more
The Egyptians are credited with the first written language, geographically diversified, global investments.
but it took time for the hieroglyphs to evolve from simple Until inflation abates and central bank policy clarifies, market
pictograms to the complex forms that for so long mystified volatility may continue. In the meantime, view your portfolio
archaeologists. While the equity market has also evolved, through the Eye of Horus – a symbol of both prosperity and
dry times such as these inspire us to get back to basics; protection. Don’t be misled by the incessant headlines that
valuations, earnings growth, and corporate shareholder cause many investors to misconstrue the market’s messages
actions. Like a camel in the desert, the S&P 500 is wandering and make ill-timed portfolio decisions. Diversification, asset
in a bear market, but hope for the future is not a mirage. allocation, and a long-term investment horizon remain timeless
Even if the economic expansion ceases, the recent decline in investing principles. An ancient Egyptian proverb says: “To
equities has already discounted about 98% of the pullback have peace there must be strife; both are part of the structure
historically seen during a mild recession. Therefore, the of the world,” and this is true of the financial markets too. The
potential rewards from a significant rebound outweigh first half of this year brought significant strife, but when those
the risks of further declines. The building of the pyramids more peaceful times inevitably come, we’ll appreciate them all
may seem an easier feat than timing this market’s bottom, the more.
but investing in equities following a selloff has paid off, Have a wonderful, enjoyable and restful summer!
time and again. Since 1950, the S&P 500 has rallied about
15% on average and is positive 70% of the time after a 20% All the best.
index drop. Attractive valuations, mid-single-digit earnings
growth, increased dividends, and robust buybacks support
our year-end and 12-month S&P 500 forecasts, not just in the
US, but in the UK and Europe too. The three least expensive
sectors are our favourites: Energy, Financials, and Health Lawrence V. Adam, III, CFA, CIMA®, CFP®
Care. From an international perspective, a more dynamic, Chief Investment Officer, Raymond James

Investment Strategy Committee Members

Lawrence V. Adam, III, CFA, CIMA®, CFP® – Committee President, Nicholas Lacy, CFA Chief Portfolio Strategist, Asset Management Services
Chief Investment Officer, Private Client Group
Joey Madere, CFA Senior Portfolio Analyst, Equity Portfolio & Technical Strategy
Eugenio J. Alemán, PhD Chief Economist, Raymond James
Ed Mills Managing Director, Washington Policy Analyst, Equity Research
Professor Jeremy Batstone-Carr European Strategist,
Raymond James Investment Services Ltd.* Pavel Molchanov Managing Director, Energy Analyst, Equity Research
James C. Camp, CFA Managing Director, Strategic Income,
Eagle Asset Management* Chief Investment Office
Doug Drabik Managing Director, Fixed Income Research Anne B. Platt, AWMA®, AIF®, RICP® – Committee Chair, Vice President,
Investment Strategy
Giampiero Fuentes, CFP® Economist, Raymond James
Matthew Ziyadeh Investment Strategy Analyst, Investment Strategy
J. Michael Gibbs Managing Director, Equity Portfolio & Technical Strategy
Nick Goetze Managing Director, Fixed Income Solutions

*An affiliate of Raymond James & Associates, Inc., and Raymond James Financial Services, Inc.
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
TM
Investments & Wealth Institute (The Institute) is the owner of the certification marks “CIMA” and “Certified Investment Management Analyst.” Use of CIMA and/or Certified Investment
Management Analyst signifies that the user has successfully completed The Institute’s initial and ongoing credentialing requirements for investment management professionals.
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Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, Certified Financial Planner™ and federally registered CFP (with flame logo) in the U.S., which it
awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.