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A Message From Our COO, Renee Farida

Dear Valued Client,

I hope this message finds you well. In today’s digital era, the sophistication of cyber threats, especially identity theft and various phishing tactics, is alarmingly on the rise. We recently hosted a national webinar focusing on these digital dangers and I want to share some with you.

Highlights of Our Webinar:

Recognizing Phishing Emails: Learn to identify suspicious emails that may appear legitimate but are designed to steal your personal information.

QR Code Phishing Awareness:

Be cautious of QR codes that, when scanned, lead to malicious websites or automatic downloads of malware.

Understanding ‘Smishing’ (SMS Phishing):

Recognize and avoid deceptive text messages aiming to trick you into revealing sensitive information.

Action Steps for Enhanced Security: Switch to “passphrases” vs passwords:

Take a phrase unique to you and easy to remember and then switch out letters for numbers and symbols to maximize complexity and length while increasing memorability. EG: “my daughter graduated in 03” – My-D@ught3r-Gr@du@73d-1n-03

Use a Password Manager:

We strongly recommend using a reliable password manager to generate and store complex passwords to significantly reducing the risk of security breaches.

MFA:

Enable multi-factor authentication whenever you can either by setting up a recovery email or phone number that one-time-pins can be sent to.

Trust, but Verify:

Microsoft, Amazon, your bank, etc. will likely never call you and they certainly will never ask for access to your computer via a remote service. If you ever receive an email with a phone number or a call from an unrecognized number and something doesn’t feel right, hang up, and call the original verified phone number you were first given or Google the business’s phone number instead.

Privacy is Key:

For social media services, make sure you take advantage of any and all privacy features and settings offered. For example putting your birthday on your Facebook account may seem innocent enough, but if your profile is public then that key detail could be used by an attacker trying to impersonate you.

Your online safety is our top priority. Please remain vigilant and proactive in protecting your digital identity. For more information and resources, feel free to reach out to us.

Warm regards,

Renee Farida

COO

Risks of Excess Cash

Key Take aways

• Investors sought safety in cash following the 2022 bear market driving a record of $6 trillion in cash.

• Investors holding excess cash missed opportunities in the 2023 market and could miss potential opportunities for greater return in the future.

• Dollar-cost averaging is a way to move your cash into the market in small amounts at a regular pace.

Investors took advantage of higher interest rates in the aftermath of 2022’s bear market. Assets in money market funds soared to nearly $6 trillion at the end of 2023.

For investors, cash became a great place to park savings and earn roughly 5% interest. With cash accounts and related investments providing competitive yields not seen in the last decade, it can give investors a false sense of security as a no-risk investment choice.

Cash is often the best option for meeting near term spending needs. But before declaring cash is king, holding too much cash beyond emergency or near-term needs comes with risks as well.

Inflation Risk

The objective for investments over the long term should be to generate returns above inflation.

However, over the long term, cash has barely kept up with rising prices. On the other hand, stocks

and bonds have historically delivered annual returns that have exceeded the rate of inflation.

In other words, overly relying on cash alone could be the equivalent of getting on an investment

treadmill and not really going anywhere.

Reinvestment Risk

Another potential risk to cash is ‘reinvestment risk.’ This happens when interest rates decline,

and maturing investments are reinvested at a lower interest rate.

In today’s landscape, with the Fed likely done raising interest rates and setting its eye on

interest rate cuts in 2024, cash-like holdings may see little additional upside.

Looking at the last four interest rate hiking cycles from 1995-2018, when the Fed was done raising

interest rates, long-term returns for both stocks and bonds outpaced cash, with the first year

contributing the most.

How to Put Your Cash to Work?

In uncertain times, it’s understandable for investors to hold on to excess cash. However, investors

should be aware that holding excess cash isn’t going to build wealth over time, comes with lost

opportunity cost, and is unlikely to beat inflation over the long term.

Investors who are ready to put the excess cash to work but waiting for the “perfect time” to get invested could find the task daunting and may become stuck with indecisiveness. In reality, there is no perfect time to invest. Instead, consider dollar-cost averaging, which allows investors to take market timing out of the equation and invest that excess cash steadily over a regular time period.

Important Information:

This is for informational purposes only, is not a solicitation, and should not be considered investment, legal or tax advice. The information in this report has been drawn from sources believed to be reliable, but its accuracy is not guaranteed, and is subject to change. Investors seeking more information should contact their financial advisor. Financial advisors may seek more information by contacting AssetMark at 800-664-5345.

Investing involves risk, including the possible loss of principal. Past performance does not guarantee future results. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio. No investment strategy, such as asset allocation, can guarantee a profit or protect against loss. Actual client results will vary based on investment selection, timing, market conditions, and tax situation. It is not possible to invest directly in an index. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly.

Index performance assumes the reinvestment of dividends. Investments in equities, bonds, options, and other securities, whether held individually or through mutual funds and exchange traded funds, can decline significantly in response to adverse market conditions, company-specific events, changes in exchange rates, and domestic, international, economic, and political developments.

Bloomberg® and the referenced Bloomberg Index are service marks of Bloomberg Finance L.P.L and its affiliates, (collectively, “Bloomberg”) and are used under license. Bloomberg does not approve or endorse this material, nor guarantees the accuracy or completeness of any information herein.

Bloomberg and AssetMark, Inc. are separate and unaffiliated companies. AssetMark, Inc. is an investment adviser registered with the U.S. Securities and Exchange

C24-20799 | 01/2024 | EXP 01/31/2026

The S&P 500 Ventures Into Unchartered Territory

Key Takeaways:

• After over two years and 512 trading days, the S&P 500 has finally broken out above its previous high.

• Last Friday’s close of 4,839.81 was the first day the index finished above 4,796.56 since January 3, 2022.

• The elongated stretch between highs historically suggests above-average returns going forward.

How It Unfolded

After stumbling out of the gate to start the year, the S&P 500 has found its footing and broken out to levels never reached before. These new highs might seem a bit sweeter to equity investors considering the notably bumpy ride they endured to get here. We recently explored the historical implications of this arduous path to new highs and what it could mean for future returns. Now, we can officially timestamped the date of the record high, the 512-day duration, and its 25.5% maximum drawdown, displayed in the chart.

Periods With at Least One Year Between New S&P 500 Highs

In somewhat ironic fashion, the same cohort of stocks that torpedoed the index into the 2022 doldrums were the ones that helped lift them out. Mega-cap names propelled the S&P 500’s recovery throughout 2023 and into the start of this year. From December 31, 2021, through January 19, 2024, the NASDAQ 100 Index (NDX) beat the S&P 500 (SPX) by just over 3% cumulatively (7.97% vs 4.96%). However, from the SPX low on October 12, 2022, through Friday, the NDX beat it by over 24% (62.3% to 38.1%)!

NASDAQ 100 Pulls Down, Then Snaps Back Vs. the S&P 500

Digging into the 512-day drought for the S&P 500, we find there were 263 days of negative returns, and 249 days of positive returns. The longest consecutive daily losing streak during that period was six trading days, which happened twice, the second occurrence culminating on the October 12, 2022, low. The longest winning streak was eight trading days, which started on October 30, 2023, coinciding with the Federal Reserve (Fed) signaling a pivot on interest rate policy. This chart illustrates the dispersion of winning and losing streaks, with marked sustained out-performance precipitating the new all-time high.

Summary

While the breakout by the S&P 500 to fresh record highs is certainly welcome news, we’ll continue to keep an eye on the overall backdrop of the economy and equity markets. The fourth quarter earnings season has begun, and we expect earnings to drive the market higher from here. We forecast $235 and $250 in S&P 500 earnings per share (EPS) in 2024 and 2025, which puts a fair value range on the S&P 500 of 4,850–4,950 based on a price-to-earnings ratio between 19 and 20. LPL Research currently recommends a neutral weight to equities, an overweight to domestic versus emerging markets, an up-market cap exposure, and a tilt toward large cap growth equities.

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Asset Class Disclosures –

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

Bonds are subject to market and interest rate risk if sold prior to maturity.

Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative

minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB

and above. They generally should be part of a diversified portfolio for sophisticated investors.

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings of commodities will result in significant volatility in an investor’s holdings.

Securities and advisory services offered through LPL Financial, a registered investment advisor and broker-dealer. Member FINRA/SIPC.

Not Insured by FDIC/NCUA or Any Other Government Agency | Not Bank/Credit Union Deposits or Obligations | Not Bank/Credit Union Guaranteed | May Lose Value

For Public Use – Tracking: #531412

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.