October, Oh My! . . . Goodbye . . .

October 2018

(Download as a PDF)

Hello November!

As the temperatures began to cool down in October, Stock Market Volatility began to heat up. To make matters seem worse, the 3rd Quarter of 2018 was the least volatile 3rd Quarter since 1963*. So, if you are like me, you were happy to see October end and November begin. Now, as you receive your October Statements, you get a chance to relive the October investment climate. That gives me an opportunity to 1) put volatility in perspective, 2) give you a few reasons to smile and 3) offer a chance for us to get together and review your portfolio. So, let’s get started.


If you have been to one of my Quarterly Market Review Lunches, then you have seen the chart below. The bars in the chart show the annual return of the S&P 500. The red dots indicate the intra-year peak-to-trough decline in the S&P 500. As you can see, most years end up positive. Now, the red dots are, in a sense, inevitable. The stock market does not move in a straight line. As you can see from the chart, however, history is on the side of those who do not overreact to short-term market moves.


Now, if you attended the 3rd Quarter 2018 Quarterly Market Review, then you already know a few reasons to smile and look for opportunities in this market environment. While there could be many reasons for the recent volatility, there may also be many reasons why this market has room to grow.

First, we have an expanding economy. According to the Federal Reserve Bank of St. Louis, the US Economy grew at 3.5% in the 3rd Quarter of 2018.

Second, companies continue to report strong earnings growth. As of November 2, 2018, with 74% of the companies in the S&P 500 reporting results, the blended earnings growth rate is 24.9%.

Third, while the Federal Reserve is raising rates, we are still in a stimulative monetary policy cycle.

Finally, since 1946, the S&P 500 has produced a positive return 12 months after the Midterm Elections.


Like market volatility, it is natural to have concerns about the markets and your exposure to risks. That is where setting a time to get together to review your portfolio and understand more about you and your thoughts, makes sense. In that review, you can not only assess your portfolio’s exposure to risk, but you can also gauge your feelings towards that exposure. You may also be able to determine a better way to achieve your goals with less risk. In my opinion, you do not need to take more risk than you need to achieve your goals.


First, breathe. Volatility, while painful in the short-term, is natural and inevitable in stock market investing. Review the first chart above and, again, breathe. Second, while you may hear of all the “Black Swans” that will send the market lower, remember, there are “Golden Geese” at work as well that can move the market higher. Review those reasons to smile and look back at my reflection of 30 years post. You will see that the “Golden Geese” seem to be well in charge.  Finally, call me or as contact my office to set a time to get together and review your goals, your portfolio and your possibilities.



The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly.

Economic forecasts set forth may not develop as predicted.

Investing in stock includes numerous specific risks including: the fluctuation of dividend, loss of principal and potential illiquidity of the investment in a falling market.

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond and bond mutual fund values and yields will decline as interest rates rise and bonds are subject to availability and change in price.

Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. Market segment (index representation) as follows: US Stock Market (Russell 3000 Index), International Developed Stocks (MSCI World ex USA Index [net div.]), Emerging Markets (MSCI Emerging Markets Index [net div.]), Global Real Estate (S&P Global REIT Index [net div.]), US Bond Market (Bloomberg Barclays US Aggregate Bond Index), and Global Bond Market ex US (Bloomberg Barclays Global Aggregate ex-USD Bond Index [hedged to USD]). S&P data © 2018 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. MSCI data © MSCI 2018, all rights reserved. Bloomberg Barclays data provided by Bloomberg. FTSE fixed income © 2018 FTSE Fixed Income LLC, all rights reserved.

 Investment Advisory Services are offered through Williams Financial Planning, Inc., a registered investment adviser. and Insurance products and services are offered and sold through individually licensed and appointed agents in all appropriate jurisdictions.

* Source LPL Financial

October, Oh My! . . . Goodbye . . .