2024 Midyear Client Letter

To All of Our Clients,

It is a pleasure to update you on the general progress of our portfolio – and, more importantly, our financial plan – during the first half of 2024.

Before delving into specifics, I’d like to reiterate a few of the core principles that guide our investment and financial planning approach here at SageOak®…

Timeless Beliefs & Principles

• We are goal-focused, long-term investors, developing portfolios that are driven by your most cherished lifetime financial goals and dreams.

• The economy cannot be consistently forecast, nor the markets consistently timed.

• Therefore, while the financial markets inevitably experience ups and downs, we maintain our commitment to a well-diversified, evidence-based portfolio of investments we believe in.

• Historically, this approach has proven to be the most reliable path to long-term financial success.

• In summary, your “return on investment” is important, but your “return on life” is the ultimate goal.

Now, with those reminders for context, let’s dive into the current economic and financial landscape.

Current Economic & Financial Landscape

During the first six months of 2024, the U.S. observed modest economic growth and relatively strong job growth. Inflation has been slow to recede, prompting the Federal Reserve to maintain its current interest rate policy.

Despite inflation’s lingering persistence, the U.S. stock market has performed well overall, with all three major indexes reaching new highs.

This positive momentum is largely attributed to increased corporate earnings and dividend payouts.

In aggregate, analysts expect year-over-year earnings growth of 11.3% for 2024 and 14.4% for 2025 for the S&P 500.¹

Additionally, the companies that make up the S&P 500 Index are still paying out a below-average percentage of earnings compared to historical averages over the last 20 years or so (approx. 35.65% vs. 41.90%).²

So, if expected earnings come to fruition, there would appear to be quite a bit of room for further dividend growth this year and next.

Closing Summary

While external events like the looming election, Fed rate cuts, wars, and government shutdowns may capture the headlines, key financial metrics like earnings and dividends ultimately drive the long-term value of the underlying companies we own.

Focusing on these (and many other) fundamental financial metrics and tuning out the “noise” of the 24/7 news cycle is crucial for long-term investors. The more you do that, the lower your chances of being your own worst enemy as an investor are.

Our long-term approach, grounded in timeless financial wisdom and backed up by decades of research in the field of financial science, is designed to give you the best chance possible of reaching your goals and dreams.

If you’d like to chat with Stan, Steve, or me about your portfolio or financial/investment plan, please feel free to reach out at any time.

As always, thank you for the opportunity to serve you. It is a privilege and a pleasure that we don’t take lightly!

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