As the 4th quarter begins and we begin to start winding the year down, we can only hope that the markets will continue this current uptrend through year end. By all counts, following a disappointing year for stocks in 2018, this year has been a strong year in the stock market so far. Large Cap Growth stocks have led the way with an average return of 23.3% on large cap growth stocks in the Russell 1000 index as of September 30th, 2019. We have also been surprised by some attractive returns in the bond market relative to what was expected at the beginning of the year. This pleasant surprise was caused by the Federal Reserve’s decision to lower interest rates, which for many, was not originally expected. Small Cap Stocks have lagged other stocks, with an average return of 14.2% return in the Russell 2000 small cap stock index. As of the end of the quarter, all major asset classes have returned positive results so far in 2019.
Economists and analysts are still in debate as to the long-term sustainability of our current bull run, and sooner or later, we will likely see some of our key economic indicators point to slower short-term growth than what we have experienced over the past 10 years. This could result in slower growing stocks, which makes it important to keep our long-term perspective and continue to hold a variety of diversified asset classes.
Earlier this month, we sent out a link regarding LPL’s “recession watch” indicators. We continue to monitor economic conditions and will communicate any information that we believe is relevant. In this article, we discuss some alternative investments that we are utilizing that can add stability during times of market volatility.
In addition, we have added an additional analyst and trader, Mae Christenson, to our group as of July 1st of 2019. With this additional resource, we are continually adding new Asset Management systems and procedures that will continue to refresh and improve our already strong platform.