| Index Returns* | 1-Year Annualized % | 5-Year Annualized % | 10-Year Annualized % |
|---|---|---|---|
| S&P 500 | 5.2% | 14.3% | 7.9% |
| Russell 2500 | 1.5% | 13.1% | 8.3% |
| MSCI EAFE | 0.4% | 5.3% | 4.5% |
| MSCI Emerging | -14.2% | -2.5% | 6.0% |
| Barclays Aggregate Bond | 2.0% | 3.0% | 4.7% |
| Treasury Bill - 3 month | 0.0% | 0.0% | 1.2% |
*Includes reinvested dividends
October Bounce
After a challenging stock market over the summer the markets soared in October with all global markets up between 6-8% for the month. What has changed since the end of September to cause this large one-month increase – very little. That is why it is so difficult to time the stock market on a short-term basis. Therefore, we recommend investors focus on valuations and earnings as they will drive returns over the long-term. Worrying about short-term market movements will only drive you crazy.
Social Security Changes
In a surprise move this last month the recently approved budget resolution eliminated two of the most popular social security claiming strategies – file and suspend & restricted application. Both strategies primarily impact married couples and their ability to maximize their combined benefit.. Some individuals get grandfathered in and others have until May 1st to implement these strategies if they qualify. A link to an article is below and FSI will be posting a blog post in the near future with further details. If social security is important to your financial plan it may be a good time to get a new plan or an update.
Emerging Markets – 1998?
The chart above demonstrates the struggles of emerging market stocks over the last five years. Below is a link to an excellent article on this subject titled Investing versus Flipping. The summary is the author compares investing in the emerging markets or the US today compared to 1998. In 1998 US stocks were on a tear with the tech bubble and emerging markets were going through the Asian debt crisis. Where would you would have wanted to invest at that time? Probably not emerging markets, but they returned approximately 10% per year during the next ten years whereas the US market was approximately flat with no return. This is the challenge of investing as sometimes you have to buy the ugliest house on the block.
Interesting articles read last month
Paying For College: Understanding The New Prior – Prior FAFSA Filing Format
