As we begin 2024, we continue to see short-term yields as attractive. We have dialed back our near-term enthusiasm for longer term yields following the sharp rally during the past couple of months. The move in longer term yields since October in part reflects what are likely faulty expectations for imminent Fed rate cuts. U.S. equities are very expensive and unattractive in aggregate, with limited pockets of value. Gold should continue to act as a good hedge to governmental irresponsibility and geopolitical instability. The energy sector should be well positioned following underperformance last year, expanding domestic production, a depleted strategic reserve which should provide a price floor, and war tensions in the Middle East that have the potential to drive prices sharply higher.

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