Last week, we looked back on our “On Track” predictions for 2023 that were published in early December 2022. This week, I would like to discuss some things we did not expect.

The value of cash remains the top priority for the year, especially given the collapse of Silicon Valley Bank, Signature Bank, and most recently, First Republic Bank. While the struggles of these three banks could not have been predicted, the value and importance of cash has never been clearer.

While I expected a rise in Requests for Proposals (RFPs) for banking services, I have seen a real surge in RFPs over the past several weeks. It is understandable, given the concerns over certain banks and the large deposits they tend to hold. The focus now is more on a bank’s underlining strength and the quality of its collateral that should protect their deposits.

Secondly, given the unexpected and extraordinarily high levels of rain and melting snow in several western states, draught worries are no longer an issue. As of now, all of the western reservoirs are, or soon will be, at 100% capacity. Having abundant water supplies again might well lead to bumper crops. That said, the costs of fertilizers and energy continue to rise, so the level of any easing in food prices is yet to be determined.

Higher Ed’s struggles in attracting new students continues to be a challenge, but there appears to be some growth potential in technical-skill and trade schools, as they are starting to see increased enrollments.

Taking all these facts into consideration, the value and quality of your deposits and investments of cash must remain paramount, especially given the level of revenue that can be generated to offset higher inflation and potential budget gaps.

That has been three+one’s consistent message over the last several years.