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A PROMISING START AND ADISAPPOINTING END 1The year started off well, opening with the best January for theS&P 500 since 2019.1 We closed out 2022 with a fed funds rate of 4.25 4.5%,2 and fourth-quarter gross domestic product (GDP) camein at a solid 2.7% year-over-year.3 As a result, the Federal Reservewas expected to raise rates one more time before pausing hikes.Some analysts even speculated on the possibility of rate cutsbefore the end of the year and that the Fed might pull off thepromised “soft landing” for the economy.Unfortunately, expectations didn't match reality. First, inflationdidn't cooperate, as the rate of decline slowed and began levelingoff. By the end of February, the consumer price index (CPI) stayedstubbornly high at 6% year-over-year, a slight 0.4% decline fromthe previous month.4 What's causing the plateau? The significantdrop in inflation rates last fall were likely related to a decline in gasprices, which hit record highs last July.5 As the cost of gasdropped, the savings were passed on to consumers. But othercomponents of inflation - including higher labor costs, supply-chain hiccups, and ongoing consumer demand - all conspired tomaintain elevated inflation rates. Employment was another big factor rattling markets in the firstquarter. The Fed's goal is to bring down interest rates bydestroying demand, and the first step to achieving that goal iseliminating jobs. So far, they haven't been successful. The Bureauof Labor Statistics reported that we added 504,000 nonfarmpayroll jobs in January and an additional 311,000 in February.6For markets, the robust employment reports fell into the “goodnews is actually bad news” category, dashing hopes that the Fedwould pause its rate hikes or even cut rates in the back half of2023. This disappointment led to January gains giving way toFebruary drops. Markets limped into March but ultimatelyfinished with monthly and quarterly gains. Equity Performance as of March 31, 2023Equity Index Q1 1 YR 3 YRS 5YRSDespite a strong start,markets slid throughthe second quarterwhile the Fed stayedtrue to its stance oncontinued interest ratehikes. A “soft landing”for the economy is lesslikely, especially as levels and employmentremains stable.S&P 500: NASDAQ: DJIA: 7.03%16.77%0.38%-9.29%-14.05%-4.05%16.71%16.65%14.93%9.25%11.59%6.66%Sources: Morningstar. Index Performance: Return (%). https://www.morningstar.com/indexes/spi/spx/quote. Accessed April 1,2023. Morningstar. Index Performance: Return (%). https://www.morningstar.com/indexes/xnas/@cco/quote.Accessed April 1, 2023. Morningstar. Index Performance: Return (%).https://www.morningstar.com/indexes/dji/!dji/quote. Accessed April 1, 2023.1 S T Q U A R T E R - 2 0 2 3R E P O R TFULLERT O N F INANCIAL P L AN N I N G

If interest rates are managed properly, investors can lock insignificant yields. Opportunities abound, especially as fixed incomereestablishes itself as a viable component of a total return strategy.However, it could be a good idea to act quickly on theseopportunities, as they could diminish if the Fed begins toimplement rate cuts.U.S. Treasury Bond Yields as of March 31, 2023Name Yield2-year5-year10-year30-year3.98%3.53%3.45%3.66%Source: Bloomberg.com. https://www.bloomberg.com/markets/rates-bonds/government-bonds/us. Accessed April 1, 2023.1 S T Q U A R T E R - 2 0 2 3R E P O R TBANK CLOSURES CREATEADDITIONAL TURMOILAs markets struggled to regain their footing in early March, theyreeled from another blow. Regulators seized Silicon Valley Bank, aCalifornia- based bank predominantly serving tech companies andventure capital-backed startups.7 Another institution, SignatureBank in New York, also failed just two days later.8 The news initiallyhit markets hard, as it remained unclear whether the U.S.government would provide a bailout. In mid-March, authorities saidthey planned to waive the $250,000 FDIC insurance limit. Alldepositors at both banks would regain access to their funds, and alllosses would be restored.9The narrative shifted following the bank closures, going from a “ratesfor higher and longer” discussion to whether the Fed should pauserate hikes due to the mini-banking crisis. The Fed responded in lateMarch by raising rates another 25 basis points (0.25%), taking the target Fed Funds rate to 4.75-5.0%.10 It's the first time the target rate hasreached 5% since 2006.11The biggest concern is that the Fed will overdo it with the interestrate hikes. It has already broken the housing market and delivered abig blow to the banking system. Staying on its current course couldresult in the Fed breaking something it can’t put back togetherquickly and force us into a recession.There is some good news: After being declared nearly dead in 2022,traditional 60/40 portfolios are making a comeback.12 This is mostlydue to a rebound in bond yields, which have risen over the past fewmonths:THE RETURN OF THE 60/40 PORTFOLIO FU L L E RT O N F IN A N C I AL P L AN N I N G

3 / 23 -279170 6SOURCES1 Sarah Min and Samantha Subin. CNBC. Feb. 1, 2023. “Dow closes more than 350 points higher, S&P 500 caps best January in four years.” https://www.cnbc.com/2023/01/30/stock-market-futures-open-to-close-news.html. Accessed March 14, 2023.2 Igor Greenwald. Investopedia. Dec. 14, 2022. “Fed Downsizes Latest Rate Hike, Remains Hawkish on 2023.” https://www.investopedia.com/fed-rate-hike-dec2022-6891883. Accessed March 14, 2023.3 Bureau of Economic Analysis. “Gross Domestic Product, Fourth Quarter and Year 2022 (Second Estimate).” https://www.bea.gov/data/gdp/gross-domestic-product. Accessed March 14, 2022.4 Bureau of Labor Statistics. March 14, 2023. “Consumer Price Index – February 2023. https://www.bls.gov/news.release/pdf/cpi.pdf. Accessed March 14, 2023.5 Bureau of Transportation Statistics. Aug. 18, 2022. “Record Breaking Increases in Motor Fuel Prices in 2022.” https://www.bts.gov/data-spotlight/record-breaking-increases-motor-fuel-prices-2022. Accessed March 14, 2023.6 Jeff Cox. CNBC. March 10, 2023. “Payrolls rose 311,000 in February, more than expected, showing solid growth.” https://www.cnbc.com/2023/03/10/jobs-report-february-2023.html. Accessed March 14, 2023.7 Erin Doherty and Hope King. Axios. March 13, 2023. “How Silicon Valley Bank failed.” https://www.axios.com/2023/03/13/silicon-valley-bank-collapse-market.Accessed March 14, 2023.8 Geoff Mulvihill. Fortune. March 13, 2023. “Signature Bank was seized to send a message to other banks that ‘we don’t want you dealing with crypto,’ director says.”https://fortune.com/2023/03/13/signature-bank-seized-to-send-a-message-crypto-barney-frank/. Accessed March 14, 2023.9 Tobias Burns. The Hill. March 13, 2023. “Here’s who is paying to restore Silicon Valley, Signature Bank deposits.” https://thehill.com/business/3898423-heres-who-is-paying-to-restore-silicon-valley-signature-bank-deposits/. Accessed March 14, 2023.10 Jeff Cox. CNBC. March 22, 2023. “Fed hikes rates by a quarter percentage point, indicates increases are near an end.” https://www.cnbc.com/2023/03/22/fed-rate-hike-decision-march-2023.html. Accessed March 22, 2023.11 Taylor Tepper. Forbes Advisor. Feb. 1, 2023. “Federal Funds Rate History 1990 to 2023.” https://www.forbes.com/advisor/investing/fed-funds-rate-history/. AccessedMarch 14, 2023.12 Mehnaz Yasmin. Reuters. March 3, 2023. “Analysis: Sharp drop in equity premium may mark return of 60/40 portfolio.” . Accessed March 14, 2023.The opinions in the preceding commentary are for general information only and are not meant to be predictions or an offer of individual or personalized investmentadvice. They also are not intended as an offer or solicitation with respect to the purchase or sale of any security. This information and these opinions are subject to changewithout notice. Any type of investing involves risk, including the loss of principal, and there are no guarantees. AE Wealth Management, LLC does not assume liability forany loss which may result from the reliance by any person upon any such information or opinions.The advisory firm providing you this report is an independent financial services firm helping individuals create retirement strategies using a variety of investment andinsurance products to custom suit their needs and objectives. Investment advisory services offered only by duly registered individuals through AE Wealth Management,LLC (AEWM). AEWM and advisory firm are not affiliated companies.LOOKING AHEADThe events of the first quarter serve as a reminder that a recession isstill possible (and probable) in the coming months. Markets will likelyremain volatile as we enter the second quarter of 2023, particularly ifthe Fed continues on its path. If it doesn’t change course quicklyenough, we could be in for the “hard landing” everyone wanted toavoid. If you haven’t done so lately, we recommend scheduling anappointment with your advisor to review your financial plan and makesure your investments are aligned with your goals. Short-term eventswill likely continue to rattle markets over the next few months. If theseevents become distracting or discouraging, turn to your advisor forsupport. He or she can help you stick to the plan and continueworking toward your long-term goals.1 S T Q U A R T E R - 2 0 2 3R E P O R TFU L L E RT O N F IN A N C I AL P L AN N I N G