After the Hardware Boom: Long-Term Value Creation in the Generative AI Era

The modern technology stack can be visualized as an advanced jet airplane. Computer hardware is the jet engine and the fuselage; the chips, servers, and networking gear that provide the power and backbone for flight.

S&P 500 Achieves Record Start in Early 2024, Driven by AI Optimism

On the surface, the first six months of 2024 were a utopia for investors. The S&P 500 returned more than 15% with very little volatility. This advance occurred despite the Fed not cutting interest rates and with inflation remaining stubbornly elevated.

Investors wait for Fed’s next action as alternative fixed income sectors posted positive returns

The first quarter of 2024 built on the strength of last year by posting a gain of more than 10 percent for the S&P 500 index, the best opening quarter for the equity market since 2019.

How 2023’s market strength continued into the new year

Whether the markets will continue ascending for the remainder of the year will likely be predicated on corporate earnings. Additionally, investors will need to navigate potential volatility caused by the timing of rate cuts by the Federal Reserve, a presidential election, and the overall health of the consumer.

A Long-Term Focus on Companies Capable of Benefiting From Change

Narratives and themes regularly influence parts of the economy and financial markets. Occasionally, such themes become so dominant that, for a period, they disproportionately drive groups of stocks, both positively and negatively.

Navigating Unpredictability Requires a Long-Term Approach

The fourth quarter, and 2023 in general, provided yet another example of how rapidly things can change in capital markets. After weak returns in the third quarter, intermediate and long-term interest rates moved down sharply to end the year.

The Importance of Earnings Power Amidst Changing Market Expectations

Against the backdrop of low expectations, 2023 helped wash away the sour taste of 2022. The S&P 500® index returned more than 26 percent and all major indices posted handsome advances.

Committing to a Long-Term Strategy in the New Year

Nearly every financial publication this time of year includes forecasts for everything from stocks to bonds to GDP growth, inflation, employment, interest rates, election season, and geopolitical unrest.

Strong Portfolio Companies in the Face of Economic Challenges

Both September and the third quarter have well-earned reputations for being the most challenging periods of the calendar year for investors, and both continued that trend in the third quarter of 2023 as all major equity indices posted losses.

How Being Generalists Leads to Stronger Portfolios

Last quarter, we wrote about Riverbridge’s investment culture and the ways that culture incentivizes behaviors we believe make our clients’ portfolios stronger over the long term.