Quarterly Client Update Q3 2024
Football season is in full swing around the office. Eric coaches Cade’s flag football and Josiah’s tackle football teams. Mike enjoys only being a spectator for Dylan and Cameron’s flag football team. Each boy also manages a fantasy football team, diving deep into analytics and learning a lot about expectations.
Freckman Photos (Cade, Jen and Josiah, Kaylee, Eric and Josiah):
McKevitt Photos (Cameron, Dylan):
Each week, they can see which of their buddies they are going up against, and ESPN will assign expected points for each player and the head-to-head matchup. They treat these predictions as inevitabilities. We can’t help but see the similarities in the financial markets.
Market analysts and pundits have price targets and predictions for each stock in your portfolio and each market index. For some investors, these predictions feel inevitable; seasoned investors know they aren’t worth paying attention to. A look at the past year highlights why this is the case.
In Q3, US stocks were up 6.23% and for the past year, they are up 35.19%1. These are staggering numbers, but the idea that analysts could have predicted any of this is laughable when looking at the context in which these returns happened. In the US, investors could have been easily spooked by the assassination attempts of President Trump, President Biden dropping out of the race, the threat of a government shutdown, or the dock workers strike which most assumed would last weeks and not days.2 Internationally, Russia and Ukraine remain at war, while Israel is now at war with Hamas and Hezbollah. The threat of China blockading Taiwan could happen tomorrow or be a what-if that we wonder about for the rest of our lives. The fourth quarter also brings an end (finally 😊) to this election cycle. We have a brief article about that here if you are interested.
How do we reconcile the strong stock market performance with the constant stream of negative news? Countless factors impact the markets, and a concise answer is not possible. The critical thing to remember is that markets will have times of high returns, like the 35% increase over the past year, and quick drops, like the 6% drop from July 31st to August 6th. These returns are a normal part of investing and highlight the normal ebb and flow of the market and the need to remain invested and take advantage of rebalancing opportunities during turbulent times.
During the first nine months of the year, we have been rebalancing from stocks to bonds, aiming to keep portfolios in balance. As we enter the fourth quarter, we focus on year-end tax planning. We will contact you if there are any adjustments that we believe would be beneficial. Please call or email if you have any concerns or questions.
1Russell 3000
2This list did not include long-term issues that could have caused market disruption at any point, including $35 trillion of debt, massive inflation from 2021-2023 (which remains above the Federal Reserve targets), and a border crisis, to name a few.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.