This was another in a string of profitable quarters for investors. It marks the eighth consecutive quarter of positive returns in the U.S. stock market. Not only were stocks higher in the third quarter, but every major asset class also moved higher. Emerging markets led the way, up 7.89% and U.S. Government Bonds generated a 0.38% return. Everything else in between from U.S. stocks, commodities and all other bond categories moved higher. The Dow Jones Industrial Average was up 4.9% and the S&P 500 was up 4.0%.

Despite tense political and social headlines, the financial markets are taking their cue from the economy. Strong corporate earnings, stable low interest rates, low inflation and a confident consumer are leading markets to new record breaking highs on a weekly basis. Anticipation of meaningful personal and corporate tax reform in the U.S. is also supporting the markets. The fourth quarter will shed more light on the likelihood of tax reform in 2018.

The Federal Reserve left their key short-term interest rate unchanged after a 25 basis point hike in each of the first two quarters. The Fed’s next action will be the reduction of their inflated balance sheet by selling trillions of dollars of bonds they purchased during the quantitative easing programs. There also remains the question of a potential December hike, which is believed to be firmly on the table in light of the uptick in inflation along with the Fed’s stated intentions.

Stocks typically have two or three 5-10% corrections within a calendar year. This is normal and expected. This year, the stock market has yet to produce even one 5% correction. If we do finally get a correction in the fourth quarter, remember to use it as an opportunity to buy low. Do not throw in the towel on your financial plan. Stay your course and stay invested.


You already know that nothing is certain in investing. But the chances of positive investment returns increase when you stay invested over longer periods of time and are even better when coupled with owning a better-diversified portfolio. And those higher percentages – better chances of positive returns – can be the key to helping achieve your long-term goals.

Time in the market – Staying invested over longer periods of time increased investors chances of earning positive returns. That was true for stocks, a mix of U.S. stocks and bonds and a better-diversified portfolio that includes international stocks. So if you are tempted to get out of the market, reconsider. Time in the market is more important than timing the market.

Better-diversified portfolios – Adding fixed income increased the chances of earning positive returns across all time periods compared to owning just stocks. And a better-diversified portfolio has the highest chance of positive returns – it includes a combination of U.S. and international stocks as well as fixed income. That’s one reason adding a wider variety of investments can help when market volatility increases. Keep in mind, though, that diversification does not ensure a profit or protect against loss.

Investor behavior –It’s not enough to own a portfolio personalized for your situation, based on your comfort with risk and long-term financial goals – you have to be patient and disciplined, too. An established, systematic process can help you avoid many common mistakes such as stretching for yield, selling after prices drop, trying to time the market and overconcentration.


All fiduciary advice provided, including recommendations to rollover retirement assets, are subject to the fiduciary standard. The fiduciary standard requires that all firms adhere to the Impartial Conduct Standards. This requirement will remain in place until the rule’s new full effective date, which is now presumed to be July 2019, barring further changes. The DOL’s rule delay release stated that the agency was “particularly concerned that, without a delay in the applicability dates, regulated parties may incur undue expenses to comply with conditions or requirements that it ultimately determines to revise or repeal.”


As the year-end approaches and situations change from year to year, individuals should take stock and ask themselves basic questions, such as:

  • Financial goals – are they still on track?
  • Should you reassess your risk tolerance?
  • Do you need to minimize your tax bill?
  • Review your investment performance. Is it time to rebalance your portfolio?
  • Review current participation rate. Will your current contribution level get you to your retirement goal?
  • Review all Beneficiary information. Have life events affected existing designations?

Phone: (212) 675-9360 OR (732) 583-1313

October 2017