Last month, I wrote in my commentary that we were experiencing the worst quarterly bond market losses since 2008. Investors were flocking for fear that interest rates would rise. That uncertainty remains, and I still view the bond market as a very frightening place. Interest rates will have to rise, and government funding problems are looming large before year’s end. This will continue to negatively impact the bond market.
As an alternative, I suggested looking to the stock market, specifically at dividend paying U.S. stocks. That strategy has worked well over the last month. Going forward, we will look to developing markets and overall international stocks for diversification within the market.
We also have been in active rebalancing mode for clients over the last few months, moving recent market gains into alternative investments which have performed well on an annual basis. Much of that work is complete, and we feel confident that we can go into fall without a lot of changes.
While we feel that the recent moves we have made will serve our clients well through the end of the year, I wanted to offer a word of caution about the month of August. For the last 23 years, August has been the worst performing month for the S&P 500. Don’t panic. Over the last 25 years, the S&P has gained, on average, 3.6% overall from August to December. In addition, 9 of the last 25 years have generated at least a 10% gain in the S&P from August to September.
Finally, you have probably received your invitation for our upcoming Timmy’s Mountain One-Club Golf Tournament on September 6th at Bear Creek. This tournament is a fun and wacky afternoon of golf using only one club! We hope you can join us for a great time to benefit Just Because We Care. Other events in the works are our Trivia Night in November, and a 5K and Fun-Run in the spring. Stay tuned for details!
We appreciate your great support – and remember, a referral is our best compliment. Stay healthy, wealthy and wise … and certainly, stay tuned.