As part of Secured Retirement’s ongoing commitment to keeping you informed, we’re sharing key takeaways from our recent Investment Committee discussions and current market insights.
Each month, we meet with our AE Wealth consultants and other third party portfolio experts to review notable economic developments and assess their impact on financial markets.
We will continue to share these updates with you and hope you find them helpful in navigating this ever-changing landscape.
Economic Backdrop
Following signals from earlier this summer, in September the Federal Reserve initiated a modest rate cut. This move was widely anticipated and is aimed at providing support to a cooling job market while balancing inflation pressures.
Policymakers may consider additional cuts before year-end. While this could provide relief for consumers and certain sectors, the long-term impact on inflation and interest rates remains a key area that we are monitoring closely.
Overall, the economic picture remains constructive. Corporate earnings have held up well, and inflation has been gradually moving in a favorable direction. That said, consumer sentiment has softened in recent weeks. This highlights the importance of staying attentive to shifting economic conditions.
Market Environment
Equity markets have shown resilience. There is continued strength across both domestic and international stocks. Within the U.S., market leadership has seen some shifts. Smaller companies are showing momentum in line with well established growth sectors. International markets have also contributed positively, particularly in Asia.
Recent drops in U.S. Treasury yields can be mostly attributed to weaker economic data and growing expectations that the Federal Reserve will cut interest rates. Bonds tied to credit risk, such as high-yield and international debt, have held up well. A weaker U.S. dollar has helped boost returns on foreign investments.
Sector performance has been varied. Technology and communication services remain standouts. We’ve also seen gains in more cyclical areas like industrials and financials. This broadening of performance provides greater diversification benefits than we observed earlier in the year.
Committee Positioning
In light of these developments, the Investment Committee made incremental adjustments to portfolios. We’ve slightly increased our exposure to growth-focused investments and extended the maturity of some of our bond holdings. These adjustments aim to take advantage of potential gains and improve diversification, while keeping risk levels in check.
Our approach continues to be focused on long-term growth. We value patience and discipline over reactionary moves in the face of market volatility. This measured strategy is intended to balance opportunity and risk, supporting sustainable portfolio outcomes over time.
Looking Ahead
As we enter the final quarter of the year our outlook is cautiously optimistic. The prospect of additional rate cuts may act as a tailwind, but factors like shifting consumer confidence, global growth trends, and geopolitical risks warrant ongoing attention.
We believe our current portfolio positioning strikes an appropriate balance. We provide exposure to areas of opportunity while guarding against near-term uncertainty. As always, our focus is on aligning investment strategies with your long-term goals and risk tolerance.
If you have questions about how these developments may affect your own plan, we’re here to help. Give us a call: 952-460-3260.
