December 2022 Pricing Commentary After two consecutive months of positive equity returns, the North American stock market indices declined across almost all industry sectors in December. As we previously commented last month, investors have been deeply fixated on the monetary actions of the U.S. Federal Reserve and their data-dependent approach to combat inflation. Interestingly, the December economic data produced both strength, weakness, and confusion. For instance: November unemployment payrolls, factory orders, and new home sales all improved, whereas retail and vehicle sales, durable orders, housing starts and existing home sales all declined. Despite the U.S. inflation rate’s second monthly reduction to 7.1%, the Federal Reserve continued to apply its aggressive inflation-fighting policy and increased the benchmark Federal Funds rate by 0.5% at their December meeting. Consequently, this central bank action rattled securities markets causing price weakness into year end. In looking back over 2022 and into 2023, investors’ heightened concerns over global central bank monetary tightening has enervated any appetite for common stock and fixed income securities. In fact, investors are so focused on elevated inflation and fears of an impending recession that they are overlooking a resilient economy, respectable corporate earnings and profit margins, and declining energy prices. With pervasive negative sentiment overhanging the securities markets, we believe that investors are “throwing out the baby with the bathwater”. In our view, investors are over-reacting with their bearishness. We believe that the glass is half full rather than half empty. As a result, we anticipate that 2023 should bring forth lower interest rates, a more accommodative central bank interest rate environment, and solid corporate earnings. We expect increased company share buybacks and mergers and acquisitions due to severely undervalued common stock prices. We are confident with our three ABC Funds portfolio holdings which encompass numerous larger capitalization and dividend-paying beneficiaries of any market recovery in 2023. Irwin A. Michael, President I.A. Michael Investment Counsel Ltd.