Another quarter ends with very positive returns for the equity markets, causing many to ask . . . . “Is there an end to this seemingly euphoric feeling that investors have about stocks?”
We believe the answer is “no” for the foreseeable future. Why do we think this? Well one reason is that the markets have been amazingly resilient over the past 9 months. Think about it. We have all endured the January flash crash, a new President, North Korea, Brexit, elections in Europe, failed ObamaCare Reform, etc. and we are still seeing new record highs in the stock market. What will it take to impact the current market momentum? In this regard, it is worth noting that even Warren Buffet is bullish, as he was recently quoted as saying that “Dow 100,000 is certainly possible” (the Dow is currently at 22,400). He did not venture to say when. We could have used that bit of information.
The second reason we believe the markets will continue to rise is the ever present state of innovation that exists in our economy. Who would have thought ten years ago that an online shopping company would become one of the largest and fastest growing companies ever. Yes . . . . we are talking about Amazon.com. That kind of innovation will continue to drive the economy …. Creating new jobs, increasing profits and making the U.S. the market of choice for the world’s investors. And as long as there is demand for quality securities, the markets will rise.
For the 3rd quarter that just ended 9/30/2017, we saw continued improvement in all of the major indices. The Dow ended the 3rd quarter up 4.94% and up 13.1% for the year. The S&P 500 had a slightly lower gain for the quarter rising 3.96% but the index is up 12.5% YTD 2017. The MSCI EAFE Index, a benchmark for international performance was up 5.4% for the quarter beating both the Dow and S&P returns for the same period. Fixed income returns continue to be low, as the Fed starts it’s process to unwind from Quantitative Easing (QE) and raise rates in a way that does not inhibit advancements in the stock markets.
Please find enclosed your quarterly management reports for the retirement plan that you sponsor.
As is our practice each quarter, let us know if you would like us to conduct on site investment advisory sessions, or a market update investment presentation. We want to do all that we can to help you maximize the benefit derived from this valuable employee benefit plan.