2023 Midyear Client Letter


We are even more delighted than usual to report to you at midyear on the events of the last six months. Tom, Frank, and Lindsey look forward to seeing you in the coming weeks and welcome your questions and comments in the meantime. As always, we begin this letter with a brief review of the ideas that guide us.


  • We are long-term and driven by planning. We work continuously towards better long-term outcomes, as opposed to overreacting to current events and conditions. Our clients share this view and do the same.
  • We believe that the economy cannot be consistently or accurately forecast, nor the market timed. We believe that our best chance to capture the full long-term return of equities is to ride out their frequent, sometimes significant, but historically always temporary declines.
  • These convictions are the foundation of our investment approach, as we pursue your most cherished financial goals together.

Review and Looking Ahead

After declining sharply for the entire year, the S&P500 ended the year at 3,840 a decline of -19.64%i . Inflation had peaked to levels not seen since the 1970s, and as the year turned it seemed as if the economy might well be in a no-win situation. On one hand, the Federal Reserve could tighten credit conditions enough to stamp out inflation, thereby plunging us into recession. On the other hand, it could relent, potentially avoid a recession, but allow inflation to burn on and erode our purchasing power and retirement plans. Either way, it seemed obvious that corporate earnings must be about to decline significantly, boding ill for the stock market.

Review and Looking Ahead

As Frank previously wrote in his article Changing Lanes: "Balanced" Portfolios, 2022 also produced a record-breaking loss for bonds with the 10-yr Treasury having its worst year ever recorded and the 30-yr Treasury having the worst year since 1754, prior to the founding of the United States! In fact, 2022 was the first time that investors have suffered double digit declines in both US equities and fixed income in the same calendar year.ii

To top all of this off, the first half of 2023 added three new and potentially critical uncertainties: the specter of US sovereign debt default, a wave of bank failures that seemed to threaten the banking system itself, and a renewed outbreak of fear surrounding the dollar's status as the world's reserve currency.

We remind our readers of how dire things looked at the beginning of the year, and how certain a decline seemed, to provide perspective. Against this backdrop, the S&P500 closed out the first half of 2023 at 4,450, an increase of nearly 16% at halftime of the yeariii. As Peter Lynch once perfectly put it: "The real key to making money in stocks is not to get scared out of them."

Anecdotally, the nearly universal pessimism of the new year has been replaced by a widespread optimism that we will manage to avoid a recession while inflation cools. This is further propelled by enthusiasm for volatile technology stocks and exploding interest in artificial intelligence. On this sentiment, the NASDAQ Composite Index, which is heavily weighted towards information technology stocks, is up almost 33% year to date and just had one of its best six-month periods everiv.

FOMO – Fear of Missing Out – is on the rise. It strikes us that people that express this sentiment are committing basically the same error in July that others did in December: allowing a short-term narrative to dominate their investment strategy. The former episode saw selling in anticipation of a bear market while the current one sees buying in anticipation of a bull market. Fear is fear: getting scared out of the market and getting scared into it are essentially the same thing in the long run.

To be very clear, we are not forecasting some kind of Dotcom era level crash. We do not forecast anything because we cannot predict the future. The most important lesson of the tech bubble is that exciting new technologies do not alter the basic nature of capital markets: that market prices are a function of earnings and only disconnect from cash flows temporarily. This is a supremely relevant thing to remember today, and it ought to guide our expectations.

The real question is whether short-term labels (such as "bull market", "bear market", "recession", "correction", etc.) are of any practical use in formulating long-term investment policy. Consider that in 1973, the last time that prices in America as measured by CPI were rising as quickly as they are today, the S&P500 closed the year at 96 compared to yesterday's close of 4,450v. With dividends reinvested, this is a total return of 14,341.35% (a $1,000 investment would be worth over $140,000 today)vi.

Please keep that incredible fact in mind as you consider that the S&P500 has suffered eight deep bear market declines over the same fifty years since 1973. Four of these times the S&P lost over a third of its value and it was halved twicevii.

What purpose is served by dividing the past fifty years into a series of bull and bear markets? None that we can see. In fact, we believe that it is more constructive to view the market as being in a state of permanent advance, interrupted by temporary declines. The history of investing has been as prosperous for investors with a long-term view as it has been traumatic for speculators with a short-term view. The difference is that the former does not allow their long-term plans to be compromised by the fears of the moment, whether they are fears of being in or of being out. They chose not to react.

Nick Murray recently wrote: "The essential fact is that to a long-term, goal-focused, plan driven investor, whether the equity market is waxing or waning— whether it's in a "bull market" or a "bear market"—is or certainly ought to be perfectly irrelevant. When the market is advancing, as it overwhelmingly does, the investor is being directly enriched by it. When it is temporarily setting back, his/her increasing dividends are being reinvested in that many more lower-priced shares. In both phases, the marvel of equity compounding continues apace."

All the above are why we are here. Frank, Lindsey, and Tom are happy to talk about the markets, your portfolio, or anything that is on your mind, any time. If you're approached by a friend, neighbor, or family member or if you know someone who needs to hear our message, please let them know that we will always find the time to listen, and we'll do our best to help.

Thank you for being our clients. It is a privilege to serve you.

Best regards,

Frank Hujsa, CFP®, CLU®
Partner, Acadium Financial Partners
27499 Riverview Center Blvd, Suite 108
Bonita Springs, FL 34134

Lindsey Hansen, CFP®
Partner, Acadium Financial Partners
3601 PGA Blvd, Suite 301
Palm Beach Gardens, FL 33410

Thomas Udovich, CFP®
Partner, Acadium Financial Partners
3601 PGA Blvd, Suite 301
Palm Beach Gardens, FL 33410



Any opinions are those of Frank Hujsa and are not necessarily those of Raymond James. Securities offered through Raymond James Financial Services, Inc. member FINRA/SIPC. Acadium Financial Partners is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc.

Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance does not guarantee future results. The information provided has been prepared from sources believed to be reliable but is not guaranteed by Raymond James Financial Services and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for informational purposes only and does not constitute a recommendation. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct.

  1. https://dqydj.com/2022-sp-500-return/
  2. https://acadiumfinancial.com/changing-lanes-balanced-portfolios/
  3. https://finance.yahoo.com/quote/%5EGSPC/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAEKADUy6863XbXc331mSz_bXR07x9_CzlPBw9Mv1l9qSKco1u8WfHBQlgOELOUbRlScjAi9jZn5qlFVHErIxlyY2J8lmzBN1SRv8DaEDCfkX3u020AIh4a-EooVAqgZulE5YQDxgQHUDMO4NzEzbA2ljqEAziNnUl6BRUjJqZvTs
  4. https://finance.yahoo.com/quote/%5EIXIC?p=^IXIC&.tsrc=fin-srch
  5. https://www.multpl.com/s-p-500-historical-prices/table/by-year
  6. https://www.officialdata.org/us/stocks/s-p-500/1973?amount=100&endYear=2023
  7. https://seekingalpha.com/article/4483348-bear-market-history