For the sixth time in the last seven years, the stock market is on track to deliver double-digit returns. This remarkable streak, interrupted only by the 2022 inflation-driven downturn, has left many investors in a positive financial position.
In November, markets experienced a brief period of volatility that affected many asset classes. While major indices have delivered strong year-to-date returns across stocks, bonds, and international investments, investors continue to worry about artificial intelligence-related stocks and the path of Fed rate cuts. At the same time, the government shutdown delayed the publication of key economic reports, making it more difficult to judge how the economy is doing.
A quote often attributed to Winston Churchill is that "it is more agreeable to have the power to give than to receive." The holiday season is a natural time to reflect on charitable giving and the role it can play as part of a comprehensive financial plan. Thoughtful charitable planning can not only support philanthropic goals, but increase tax efficiency as well. The question isn't just whether to give, but how to give in ways that maximize both the impact on causes you care about and the benefits to your overall financial plan.
As the holiday season begins, it’s the perfect time to pause and appreciate what we have, both in our personal and financial lives. This is particularly important since investors tend to focus on what could go wrong rather than what has gone right. At the moment, with markets performing well, it’s helpful to reflect on the past year to gain perspective as new challenges and opportunities emerge.
The stock market continued its strong performance in October despite uncertainty from a government shutdown and renewed trade tensions with China early in the month. Many major indices reached new all-time highs after recovering from a brief period of volatility. Bonds also contributed positively to portfolios as interest rates declined, fueled partly by the Federal Reserve's second consecutive rate cut.
Investors often find themselves looking in the rearview mirror even when they know that what lies ahead is most important. Recent reports, which are naturally backward-looking, have some investors and policymakers concerned about the economy, leading some to wonder if there will be a recession. In today’s context, there are signs that the job market is slowing and inflation remains stubborn, even as overall unemployment remains low and broader GDP trends remain positive. For long-term investors, these mixed signals make maintaining a balanced perspective more important than ever.
The stock market climbed to new all-time highs in August, while bonds also contributed positively to portfolios. This occurred despite continued uncertainty around tariffs, Fed independence, and technology stocks. The month began with U.S. tariffs going into effect against most major trading partners after the initial 90-day pause. A federal appeals court later ruled that the “reciprocal tariffs” are illegal, possibly paving the way for the case to reach the Supreme Court.
Fed Chair Jerome Powell's recent speech at the Fed's annual Jackson Hole conference, which has been covered extensively in the media, reinforced that an interest rate cut in September is likely. Powell emphasized that while there is uncertainty around tariffs and inflation, these concerns need to be balanced against supporting the job market. Markets have hovered near all-time highs recently, suggesting that investors agree with the trajectory of Fed policy and have confidence in the economy. What does a potential rate cut mean for long-term investors given the overall outlook?
When it comes to natural disasters, it's important to be prepared for earthquakes and erosion alike. Even though one is immediate and dramatic while the other is slow and gradual, both require careful planning and protective measures. Economic forces are no different - the most challenging situations that households and businesses face aren't always sudden and obvious, but can play out over many years. In the case of inflation, the risk of both sharp price increases and the gradual erosion of purchasing power are affecting financial markets today.
Rainer Wealth Management
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