Updated September 17, 2021
Our investment team remains committed to sharing regular updates and market insights to keep you informed. Please look for our next update on October 1.
Stocks Drift Lower
Equity markets have generally been moving lower over the last couple of weeks, albeit modestly. The three major indexes—the S&P 500, Dow Jones Industrial Average and NASDAQ—are all within one or two percentage points of all-time highs. With second-quarter company earnings reporting season over and a period of light economic data, there has been little to move markets. The S&P 500 is up 18.5 percent year-to-date while the Dow Jones and NASDAQ Composite are up 13.2 percent and 17.1 percent, respectively.
If you follow financial news outlets, you may know that September is historically a difficult month for stocks. The average return during September for the S&P 500 is -1.0 percent and the index is up only 46 percent of the time. While these seasonal factors make for interesting reading, they should not play a factor in your investment process. As the saying goes, time in the market is much more important than timing the market. Missing out on just a few large up days has been shown to have a substantial negative effect on returns during a calendar year.
In recent Investment Updates, we stated our belief that the current environment is supportive of higher equity prices over the intermediate term. However, periodic pullbacks should be expected from time to time.
Interest Rates Remain Stuck
Bond yields have been stuck in a tight range for most of the summer, even with the higher inflation readings over the last several months. The benchmark Ten-Year Treasury yield currently stands at 1.30 percent and has been within 0.10 percentage points either side of this level for most of the summer. Given higher inflation, strong growth and the fact that the Federal Reserve is likely to announce that it will begin to taper its asset purchase program by the end of the year, we would expect rates to trend higher, although only modestly, over the next several months.
What Should I Be Doing With My Investments?
We encourage you to pay attention to the latest developments, but not to lose sight of your long-term investment strategy. Reach out to our investment team to discuss your options and reaffirm your timeline and goals. Call our investment team at (518) 415-4401.