Dear friends of Arcus Capital Partners,
We hope this letter finds you well and that you had a wonderful holiday season. The year ended with a bang as global equities rocketed higher on the back of a surprisingly dovish Federal Reserve (the Fed). Falling inflation and a normalizing labor market provided the backdrop the Fed needed to forecast the start of rate cuts in 2024. Investors quickly piled into global equities and sent many markets to year-to-date highs by the end of December. Interest rates also declined from multi-decade highs and propelled bond prices higher. Lastly, commodities (ex-gold) were the only losers, as they were pushed to the side in favor of other asset classes. We maintain a positive view of equities but expect higher volatility and more modest returns this year. Within fixed income, we still prefer private credit to public markets. Finally, we believe investors must keep a long-term perspective and focus on adding to positions on material weakness.