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Market Highlights Q3 2021
The third quarter was a roller-coaster ride for the markets. Following a relatively steady climb in July and August, the Dow, the Russell 2000, the Nasdaq, and the Global Dow lost value in September, while the S&P 500 was able to eke out a small quarterly gain. Treasury yields, the dollar, and crude oil prices ended the third quarter higher, while gold prices dipped lower. Financials, information technology, communication services, and health care ended the quarter in the black, while energy, industrials, and materials fell by at least 4.5%. Despite the monthly and quarterly downturns, the benchmark indexes remain well ahead of their 2020 closing values, led by the S&P 500, which ended the quarter nearly 15.0% over last year’s pace.
September‘s volatility disturbed investors’ confidence after a strong July and August. But experienced investors know that gains come in bunches and that monthly and quarterly fluctuations are expected. The combination of slowing economic growth, bumpy unemployment numbers, elevated inflation, supply-chain disruptions, a global energy crunch (have you been to the gas station lately?!), and China’s regulatory restrictions all added up to unrest for investors. That seems to be playing out in a cycle of selloffs and buys that have exacerbated volatility but, ultimately, not altered the general state of the economy.
Looking toward the final quarter of the year, watch for a winding down of stimulus measures, continued supply chain issues, and myriad other factors to keep this ride exciting for the foreseeable future. When it gets a little too wild for comfort, take a deep breath, know that this too shall pass, and remember that your portfolio and your strategic plan are structured for long-term growth—even in the face of short-term turbulence. And, of course, if you get too uncomfortable at any time, call me to schedule a time to talk. I’m always happy to offer my current perspective on the market, the economic outlook, and the expected impact (or lack thereof) on your financial health.
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