The phrase "climbing a wall of worry" refers to a market trend where investors continue to buy stocks despite prevailing concerns and uncertainties. There is no doubt that we've received more phone calls lately from people worried about everything going on in the world. Who can blame them? Think about what we've had to deal with so far in 2023:

• Inflation started the year at over 8% with the Federal Reserve talking aggressively about increasing rates for the foreseeable future.
• Earnings-per-share were expected to tank.
• The 10-year US bond yield had risen from 0.5% to over 4% in one year.
• The war in Ukraine escalated and Russia made reference to nuclear weapons.
• The US experienced a regional banking crisis.

Any one of the above points could have made the market drop, yet here we are one quarter in 2023 and the market is up. This is a bullish sign! Typically when there are a lot of uncertainties in world, investors are cautious and fearful which usually reflects a market that has not fully priced. The uncertainty also explains why there is a record amount of money, over $5 trillion, invested in short-term money market funds right now.

Just imagine if some good news comes out or investor sentiment changes over the next few months. $5 trillion on the sidelines is a lot of fuel to throw into the market. As we have learned from past downturns when the market decides to go up it moves quickly, and it can be very hard to get money invested so it participates with the move. Remember March 2020, the S&P 500 moved up 20% in four months with half of that move happening in three weeks. Because of this we believe it's best to stay invested in a well-diversified portfolio so you can participate when the market recovers.

I have also included a piece by our CIBC Economics team entitled "Monthly World Markets Report".

Have a great long weekend.

Milan