Summer 2023

Red Light, Green Light 1,2,3

As the above chart of the S&P 500 demonstrates, the US equity markets have been exceptionally volatile in recent years. There have been three distinct periods of steady gains (highlighted in green): 12/14/18–2/19/20, 3/23/20–10/12/22, 10/12/22–6/30/23, when the index rallied 44.02%, 114.38%, and 27.41%, respectively. And there were three distinct periods when the index declined (highlighted in red): 9/20/18–12/14/18, 2/19/20–3/23/20, 1/3/22––10/12/22, with drops of 19.76%, 33.92%, and 25.42%, respectively.

The five-year period covered in the chart has been an especially eventful time. The financial markets have had to deal with a pandemic, a recession, the war in Ukraine, an inflationary spiral, and a rapid increase in short-term interest rates. Given the jarring economic impact of these events, it is no wonder that the financial markets have been volatile. But each time the markets have declined, they have rallied back.

So far, 2023 is keeping to this pattern. The markets sold off in 2022 on fears that the restrictive monetary policies adopted by the Federal Reserve (the Fed), principally rapid increases to short-term rates to combat inflation, would push the economy into a recession. Indeed, the Fed increased its target for the Fed Funds rate from near zero to a range of 5.0%–5.25%, the fastest increase on record and the highest level of short-term rates in 22 years. The growth rate of the US economy has slowed, but the economy has shown remarkable resiliency and has continued to grow. Gross National Product (GDP) expanded at a 2.0% rate in the first quarter of 2023 and accelerated to a 2.4% annualized rate in the second quarter. The consensus expectation for economic growth no longer calls for a recession in 2023, but for modest growth into 2024.

It is hard to be precise in assessing the impact of higher interest rates on inflation, since there is a considerable lag between the two, but it appears that the actions of the Fed are achieving their intended effect. Inflation as measured by the Consumer Price Index (CPI) has declined from a 9% rate in June of last year to a rate of 3% recently, as can be seen in the above chart. The decline in the CPI is abetted by favorable price trends in several commodities such as food and oil, but even excluding these items, inflation rates have fallen significantly. Core CPI, which excludes these volatile items, has fallen to a rate of 3.8%.

Recent economic data paint a picture of an economy that is stable and growing near its long-term rate of about 2.25%. Consumer spending slowed to a modest 1.6% annual rate in the second quarter, as higher rates impacted purchasing power, particularly for lower-income consumers. But job growth remains strong, and unemployment remains low. Interest-sensitive sectors such as housing have been weak but appear to have stabilized. The banking crisis that made headlines in the first quarter with the bankruptcy of three regional banks has so far been contained. In short, it appears that after three very eventful years, the economy is slowly returning to normal.

Given the considerable outperformance of the economy versus expectations, it is not surprising that the stock market has rallied. Corporate profit growth has slowed, but so far in this reporting season most companies are meeting or exceeding very conservative earnings estimates. The consensus is for earnings in aggregate to decline about 2% from last year.

While this year’s market rally is a pleasant turn of events from last year’s market decline, it is notable that the strong performance of the S&P 500 is being driven by a handful of large cap growth stocks. The seven largest companies by market capitalization account for about 28% of the index’s value and have contributed the bulk of the index’s advance. The remaining 493 stocks accounting for 72% of the index are essentially flat. The narrowness of the market advance poses some interesting questions: Will the market rally broaden? Will the rest of the market catch up? Or will there be a correction in the valuation of the large-cap growth stocks?

While the market is now in its green “go” phase, history has shown that at some point the market will enter a new red phase. There are plenty of potential problems that could derail the economy and trigger a market decline. Rather than attempt to predict when a disruption might occur, we believe a better strategy is to invest for the long term. Just think: Whoever invested in the S&P 500 Index at the start of Q3 2018 and held through the market ups and downs, that steady-nerved person would have earned a return of 63.71% through 6/30/23, an average annual return of 10.36%.

The lesson is simple. The equity markets may be volatile and unpredictable, but they can produce good returns for those investors who are willing to take a long-term investment approach.



John Grady

Research & Operations Associate

As Research & Operations Associate, John assists the equity research effort in support of the portfolio managers and works closely with the operations department. Prior to joining the Ironwood team in 2023, John earned his BA in Psychology, from the University of Denver. While studying, John developed several business plans for small businesses in the Denver area for a capstone project for his business minor. Prior to joining Ironwood, John was developing his research skills through an apprenticeship by regularly meeting with management teams, attending investor conferences, and developing investment theses.

Cameron Marshall

Trading & Research Associate

As a Trading & Research Associate, Cameron is responsible for investment portfolio trading and operations as well as conducting equity research in support of the portfolio managers. Prior to joining the Ironwood team in 2022, Cameron earned his BA in Economics, with a minor in Mandarin, from the University of New Hampshire. While studying, Cam held several internships working with investment teams across asset classes in both private and public markets. An active member of his community, Cam has contributed his time and energy to charities including Best Buddies International, Be Positive for CHaD Kids, and Positive Tracks.

Alyssa Wade

Director of Client Relationships

Alyssa Wade is the Director of Client Relationships and assists in the Marketing Department at Ironwood Investment Management, LLC®. Prior to joining Ironwood, Alyssa worked at Boston Technologies and Regan Communications Group. She holds a Bachelor of Arts in Communication with a minor in Education from the University of Massachusetts, Amherst.

Regina Wiedenski

Co-Portfolio Manager
Value Investment Partners (VIP) Strategies

Regina Wiedenski is Co-Portfolio Manager for the VIP strategies at Ironwood Investment Management, LLC®. Ms. Wiedenski has an MS in Management with a concentration in finance from the Sloan School at M.I.T. and a BS from M.I.T. Prior to joining Ironwood to manage VIP portfolios, she was a Portfolio Manager at J.L. Kaplan Associates. Previously she was an equity analyst at Advest, Inc. and had spent nine years as an analyst at Adams, Harkness & Hill covering healthcare, specialty chemical, instrumentation and publishing companies. She began her career as a financial analyst at Morgan Stanley.

Paul Weisman

Co-Portfolio Manager
Value Investment Partners (VIP) Strategies

Paul Weisman is Co-Portfolio Manager for the Value Investment Partners (VIP) strategies at Ironwood Investment Management, LLC®. Mr. Weisman has an MA in Industrial Organization (Applied Microeconomics) from Boston University and a BA from Haverford College. Prior to joining Ironwood as the head of the V.I.P. team in 2009, Mr. Weisman was Chief Investment Officer at J.L. Kaplan Associates which he joined in 1986. From 1983 to 1986 he was an investment analyst at Delphi Management.

Ravi Jain, Ph.D., CFA


Ravi Jain, Ph.D., CFA is a Partner at Ironwood Investment Management, LLC®. Dr. Jain has a Ph.D. in Finance from the University of Missouri Columbia (doctoral thesis on corporate spinoffs), a Master of Finance and Bachelor of Commerce from the University of Delhi. He is also a Chartered Financial Analyst® (CFA). Dr. Jain is an Associate Professor of Finance at the University of Massachusetts Lowell where his research focuses on capital markets and corporate finance.

Warren Isabelle

Portfolio Manager

Warren Isabelle, CFA is a Portfolio Manager at Ironwood Investment Management, LLC®. Prior to forming Ironwood Investment Management, LLC® in 1997, Warren was the Head of Domestic Equities at Pioneer Management Company and the Portfolio Manager of more than $3 billion in small cap assets including the Pioneer Capital Growth Fund (later renamed Pioneer Mid-Cap Value Fund), Pioneer Small Company Fund and several institutional portfolios. Warren has received national attention for his research efforts and results.  He has also appeared in feature articles in Barron’s, Business Week, Forbes, Fortune, Money and The Wall Street Journal and has appeared on “Wall Street Week with Louis Rukeyser.” Prior to joining Pioneer, Warren was an Analyst at The Hartford Insurance Company.  He earned a BS in Chemistry from Lowell Technological Institute, an MS in Polymer Science and Engineering from the University of Massachusetts, and an MBA in Finance from the Wharton School of the University of Pennsylvania.

Paul Anderson

Executive Managing Partner

Paul Anderson, CFA is Executive Managing Partner of and leads investor relations, business development and management activities for Ironwood and is a member of the management committee.  Paul joined Ironwood in December 2020 after 12 years at Natixis Investment Managers where he developed and led the U.S. institutional distribution group at Natixis Distributors L.P. Over the course of his 30 years in the industry, Paul has held roles in investment research, sales and management.  Paul holds a Bachelor of Arts in Economics from the University of New Hampshire, and an MBA from Vanderbilt University.  He is a member of the Committee on Investor Responsibility at UNH advising the UNH Foundation on sustainable investment practices.

Shantelle Reidy

Executive Managing Partner
Chief Financial Officer
Chief Compliance Officer

Shantelle Reidy is Executive Managing Partner and the Chief Financial Officer and Chief Compliance Officer for Ironwood Investment Management, LLC®. Shantelle is a member of the management committee and has served Ironwood in various capacities since joining the firm in 1998, including as Executive Director of Trading and Operations from 2001 to 2014. Prior to joining Ironwood, Shantelle was an Investor Relations Analyst at Talbots, Inc. where she conducted research for the company and managed the firm’s communication with investment analysts. Shantelle holds a Bachelor of Arts degree in Economics and Political Science from Boston University and a Master of Business Administration in Marketing and Finance from the Boston University School of Management.

Donald Collins, CFA

Executive Managing Partner
Portfolio Manager

Donald Collins, CFA is an Executive Managing Partner and Portfolio Manager at Ironwood Investment Management, LLC® and is a member of the management committee. Prior to joining Ironwood in 1998, Don was a portfolio manager with Boston Advisors where he managed portfolios for institutions and high net worth clients.  During his tenure at Boston Advisors, Don participated in the management of the Advest Advantage family of mutual funds and managed the Advantage Special Fund.  Don began his career as a Manager for Burgess & Leith.  He earned his BA in Geology from Boston University and studied at the Boston University School of Business.  In addition, Don is the Director and Investment Committee Chairman for the Abelard Foundation, Chairman and Commissioner of Trust Funds for the Town of Lincoln, MA and Director and Chief Financial Officer at Igan Biosciences.