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Naples-Based Investment & Wealth Management Advisory Firm

Brief Financial Market Update – 5-12-2023

Team Meeting

At the midpoint of the 2nd quarter, portfolios are close to unchanged so far, but up for the year to date. From an investor’s view, the economic situation is improving. Inflation data is moderating, and unemployment claims have risen to the highest level since 2021. A weaker economy reduces the risk of the Federal Reserve raising interest rates higher. Generally, this is a good scenario, but a few land mines exist.

Bank failures may continue but most likely will not repeat the financial crisis. Banks are tightening their lending standings criteria, which is also slowing the economy in addition to higher interest rates. It is possible that more weak banks will fail. Interestingly, bank insiders are aggressively buying their own stock according to recent SEC disclosures.

The next challenge to navigate is the debt ceiling. Congress needs to increase the borrowing capacity of the Treasury. Since about 20% of government spending is funded by borrowing, if the Treasury department is not able to borrow, the outcome would be very bad. We are monitoring the risk of default by following the cost of Credit Default Swaps (CDS) on Treasury bonds and considering various strategies as the default time frame gets closer.

While the political arena is ugly, corporate America is much more optimistic. For the companies that have reported earnings for the 1st quarter, earnings have fallen by 3%, much better than the 6% expected decline. Technology companies are doing better than economically sensitive businesses. Artificial Intelligence (AI) has dramatically helped many companies. Healthcare, mixed with companies that are developing new products, are performing better than those who aren’t innovating products and services.

With sentiment generally low, JP Morgan research suggests now may be a good opportunity. Historically, the SP500 rises over 20% in the twelve months after consumer sentiment bottoms. The inverse is interesting as well. In the 12 months after the peak in consumer sentiment, the SP500 rises only 3%. Thus, it’s best to be a buyer when everyone else is selling.

Our strategy recently has been to shift equities generally to larger, well capitalized companies with high credit ratings. Growth stocks are doing better as long-term interest rates are declining. Cyclical, small, and mid-cap stocks are underperforming.

In fixed income, we are slowly shifting from short-term bonds and mutual funds to longer term duration securities that lock in higher interest rates for the long term.

Feel free to contact Andy if you have any questions about the financial markets. Thank you for your business.

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  • Andrew Hill Investment Advisors, Inc. is registered as an investment adviser with the Securities and Exchange Commission (SEC), and only transacts business in states where it is properly notice filed, or is excluded or exempted from such requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. Information on this website is directed toward U.S. residents only.
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Business Continuity and Succession Plan Disclosure Statement

Andrew Hill Investment Advisors, Inc. (“AHIA”) maintains a Business Continuity and Succession Plan (“BCP”) that has been developed with the goal of protecting the health and safety of our employees and maintaining continuity of service for our clients. Our Plan is designed to ensure that we are prepared to operate through significant business disruptions, so that our clients can access their accounts without significant interruption under most circumstances.
Key elements of our BCP include the following:

  • Critical data from our computer systems is backed up daily to geographically remote, secure facilities.
  • All AHIA employees can access its computer data remotely via secure connection. If AHIA’s primary network is not accessible, AHIA maintains replicas of all files and database servers in a geographically remote disaster recovery network available to all employees over a secure connection.
  • We maintain an office evacuation plan and emergency procedures in the event of a disaster affecting our primary office facilities or surrounding area.
  • We maintain an emergency contact list and procedures updated and distributed on a regular basis.

If your account requires servicing during a significant business disruption and we are unable to assist you, please call Fidelity Investments at 1-800-523-1203 and a dedicated team member will be able to assist you. It is impossible for us to anticipate every potential problem that may occur, but we believe our BCP will enable us to conduct business in the event of a variety of possible business disruptions. We review and test our BCP at least annually and it is subject to modification based on changing circumstances and assessment of need.

As a fiduciary, AHIA has certain legal obligations, including the obligation to act in client’s best interest. AHIA seeks to avoid a disruption of service to clients in the event of an unforeseen loss of key personnel, due to disability or death. AHIA can provide additional information to any current or prospective client upon request to Andrew D.W. Hill, President at 239-450-3999 or [email protected].

Andrew Hill Investment Advisors, Inc.
Privacy Notice

Andrew Hill Investment Advisors, Inc. (“AHIA”) believes it is essential that we maintain the privacy of the nonpublic personal information provided to us and that we obtain in connection with providing our products and services to clients.  AHIA views protecting its customers’ private information as a top priority subject to the requirements of the Federal Gramm-Leach-Bliley Act.  AHIA has instituted policies and procedures to ensure that client information is kept private and secure. 

AHIA limits the use, collection, and retention of such information to what we believe is necessary or useful to conduct our business and to provide and offer clients quality products and services, as well as other opportunities that may be of interest. Information collected may include, but is not limited to name, address, telephone number, tax identification number, date of birth, employment status, annual income, and net worth. 

In providing products and services, we collect nonpublic personal information about our clients from the following sources: 

  • Information we receive from clients on applications or other forms (e.g. investment/insurance applications, new account forms, and other forms and agreements);
  • Information about client transactions with us or others (e.g. broker/dealers, clearing firms, or other chosen investment sponsors); and
  • Information we receive from consumer reporting agencies (e.g. credit bureaus), as well as other various materials we may use to put forth an appropriate recommendation, or to fill a service request.


AHIA does not disclose any nonpublic personal information about its clients or former clients to any non-affiliated third parties, except as permitted by law.  While servicing a clients’ account, AHIA may share some information with its service providers, such as transfer agents, custodians, broker-dealers, accountants and lawyers.  Additionally, we will share such information where required by legal or judicial process, such as a court order, or otherwise to the extent permitted under the federal privacy laws.  

AHIA restricts internal access to nonpublic personal information about clients to those associated persons of AHIA who need to access that information to provide services.  As emphasized above, it has always been and will always be AHIA’s policy never to sell information about current or former clients or their accounts to anyone.  It is also AHIA’s policy not to share information unless required to process a transaction, at the request of a customer, or required by law.

AHIA places strict limits on who receives specific information about client account(s) and other personally identifiable data. As a rule, we do not disclose nonpublic personal information we collect to others. However, because we rely on certain third parties for services that enable us to provide our advisory services to clients, such as our attorneys, auditors, other consultants, brokers, and custodians who, in the ordinary course of providing their services to us, may require access to information, we may share nonpublic personal information with such third parties. 

AHIA may also disclose such information to others upon a client’s written instructions.  Such written instructions may be amended, and/or rescinded at any time in writing.  If a client prefers that we not disclose confidential personal information about them to non-affiliated third parties who provide a product or service that we feel would benefit them, the client may direct us not to make disclosures to such non-affiliated third parties via an opt-out provision.  We restrict access to nonpublic personal information about clients to those persons associated with AHIA, who need access to such information in order to provide our products or services to clients.  We maintain physical, electronic, and procedural safeguards that comply with federal standards to guard clients’ nonpublic personal information. If a client decides to close his/her account(s) or become an inactive customer, we will adhere to the privacy policies and practices as described in this notice. 

AHIA reserves the right to change these Privacy Principles, and any of the policies or procedures described above, at any time without prior notice. However, clients will be promptly provided with a current copy of our privacy notice upon material changes or upon request.  Active clients will receive a current copy of our privacy notice at least annually. These Privacy Principles are for general guidance and do not constitute a contract or create legal rights, and do not modify or amend any agreements.   If you have questions about this privacy policy, or if you wish to amend or rescind your written instructions with us at any time, please call us at (239) 777-3188.