Spring 2024

“It is possible to have too much of a good thing” Aesop

The stock market rally that started in the fall of 2022 continued into the first quarter of 2024. The S&P 500 was up 10.56% in the quarter, and the Russell 2000 (the leading index of smaller US companies) advanced 5.18%. These indexes have now advanced 46.6% and 27.62%, respectively, since the rally began and are trading near all-time highs. Recently, however, the stock market has experienced a pullback that is challenging the persistence of the seventeen-month-old rally.

The US economy has proven to be surprisingly resilient the past few years. It has grown steadily despite geopolitical turmoil, an inflationary spiral, and the most rapid increase in short-term interest rates in history. The interest rate increase has confounded economic forecasters, who theorized that high interest rates would cripple the economy and trigger a recession. High rates and geopolitical problems have adversely impacted economies in Europe and China, but the US economy has managed to plow ahead pretty much unscathed, as the chart below of GDP demonstrates.

Even though the International Monetary Fund (IMF) estimates that $3.3 trillion in global economic output has been lost since the pandemic began in 2020, the US economy has bucked this trend and is now larger than it was in early 2020. Based on the economy’s continued strength, the IMF recently increased its estimate for global economic growth in 2024 to 3.2%, up from a forecasted 2.9% in October. The below chart is a graphical representation of this trend.

Thanks to this vigorous growth, the US economy is creating an average of 225,000 jobs per month and continues to operate near full employment.  But the strength of the economy is also contributing to a few unwelcome side effects, most notably inflation.

Inflation skyrocketed in the initial pandemic recovery period due to a brisk recovery in demand colliding with a supply chain bottleneck. It hit a peak of 9% in 2021, prompting the Federal Reserve (the Fed) to aggressively move to a restrictive monetary policy by rapidly increasing short-term interest rates. As supply-and-demand dynamics normalized, and the Fed’s policies had their effect, inflation rates quickly declined. With inflation approaching the Fed’s target rate of 2%, optimism grew that the Fed would indeed achieve a soft landing for the economy and would soon begin cutting rates. However, in recent months the decline in inflation as measured by the Consumer Price Index (CPI) appears to have bottomed out at about 2.78%. The following graph demonstrates this trend. Consequently, the timetable for the Fed to begin reducing rates has been pushed out to later in the year.

There is a strong correlation between interest rates and stock prices, and the expectation of higher rates for a longer time period has begun to weigh on the equity markets. Offsetting the impact of higher rates is the outlook for corporate profits, which are getting a boost from all the robust economic activity. First quarter earnings are coming out, and so far, it appears that most companies will meet or beat expectations. The below chart shows the growth in earnings per share of the S&P 500 over the last ten years. Looking forward, corporate profits are estimated to grow by 10% in 2024, 14% in 2025, and 11% in 2026.

This rosy outlook for corporate profits is reflected in the elevated level of P/E (price-to-earning) ratios. The forward P/E for the S&P 500 is 21x, about one standard deviation above the long-term average, which is exhibited in the below graph.  

The interplay of economic activity, inflation, and interest rates will likely determine the fate of the stock market over the balance of the year. If economic growth is too strong, we could have too much of a good thing, putting upward pressure on inflation.  The Fed will be inclined to keep rates higher for longer, which will ultimately weigh on economic growth and stock prices. Barring any big surprise, it appears that the US stock markets will be locked in a tug of war between growing corporate profits on the one hand and the prospect of high interest rates on the other.

Given the poor record of economic forecasts in recent years, one should view the current one with a fair degree of skepticism. It would appear that the Fed’s program to tame inflation will have a pronounced impact on the economy and the financial markets for at least the next few quarters.  While this increased uncertainty might be unsettling to investors, it is important to keep a longer-term perspective. The US economy is fundamentally strong, corporate profits are growing, and the valuation for many US companies appears to be quite reasonable.




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.