As the clock turns and we enter the fourth quarter, it’s a good time to assess our investments. If you have not spoken to your wealth manager recently, please reply to this email or reach out to him or her directly. We are here to hear you!
Our research team has a few insights about the recent past. For a more complete analysis, click the link at the bottom of the Periscope email. What follows is a brief summary.
For the past three months of 2019, our investments have been on an up-and-down roller-coaster ride. In addition to deflation concerns, which pushed the U.S. dollar higher, markets have been reacting to the ups and downs of the U.S.-China trade war saga. Now we can add a formal impeachment inquiry into the mix.
Amidst this backdrop, stocks rose in July, fell in August, then rallied in September. In the end, larger-cap U.S. stocks gained 2% in the third quarter. They are now up over 20% year to date. Smaller-cap U.S. stocks suffered more acutely during the market drops and ended the quarter down 2.3%. For the year, they are still up a healthy 14.1%. (1)
Foreign stocks outperformed in the September rebound, but it wasn’t enough to see them keep pace with U.S. stocks for the quarter. Developed international stocks fell 0.9%, European stocks fell 1.8%, and emerging-market stocks fell 4.1%. The uncertainty around Brexit continues to hang over Europe. The aforementioned rise in the U.S. dollar also hurt the foreign investment returns of dollar-based investors. Still, developed international and European markets are up by double digits this year (13.2% and 13.6%, respectively) and emerging-market stocks are up close to 8%. (1)
Due to declining interest rates, core investment-grade bond returns have been strong. The core bond index gained another 2.4% this quarter and is up over 9% in 2019! Interestingly, below-investment-grade sectors of the income world shrugged off economic worries to also do well. (1)
During most of the time between now and the US Presidential election, we expect numerous events to test our patience with our investment portfolios. There will be unpredictable and compelling reasons to sell out. Before this happens, talk to your advisor here. We will help put the scary news in perspective, for what it means for you personally, now and over the long haul.