Time to Celebrate
Come celebrate our first year anniversary with us at the Creole United Festival on October 17th at Dunphy Park in Sausalito. We are a Proud Community Partner for the festival. The event starts at 11AM and concludes at 6PM. This one-day event brings high energy, captivating entertainment by national and international musicians, featuring a live musical performance by Grammy Nominated artist, Andre Thierry. Learn more about the event at http://creoleunitedfestival.com/. There is no admission fee and any donations will go to the Performing Stars of Marin.
We appreciate all your support this past year and appreciate the trust that you have placed in our firm. We couldn’t have done this without you. Thank you.
Q3 2015 Market Update
To recap the quarter, the Dow ended down 7.6% at 16,284.70, the S&P ended down 6.9% to 1,920.03, and the international markets as measured by MSCI EAFE ended down 10.2% to 4,612.07. The Archvest benchmarks, Conservative, Moderate, and Aggressive were all negative for the quarter, down 2.5%, 5.1%, and 7.3% respectively.
We believe that the market volatility is here to stay for some time as the markets look to the Federal Reserve for clarity. Unless we see some economic growth or actions from the Federal Reserve to encourage risk taking, our gauges are telling us that we are entering a period of heightened volatility. We believe that the odds of a rate increase and an economic stimulus package are even at this point.
Here Comes China
The month of August seemed to be the catalyst month when China’s central bank ventured out to devalue the Yuan to spur economic growth in their slowing economy. What ensued in the following days was a series of selloffs in the global markets, including the worst multiday selloff we’ve seen in years, as well as the largest intraday swing for the Dow, ever.
Additionally, China lowered their key interest rate by .25% to 4.6% (for the fifth time) as well as their bank reserve requirement down .50% to 17.5% (for the third time) since November 2014. The lowered rates is the equivalent of injecting $23B into their economy and $106B USD is now available to inject into China’s market by lowering the reserve requirement.
Will Santa Come Early
If history tells us anything the fourth quarter is not only a time for the major holidays of the year, but it’s usually a good time to put money back to work in the market. Historically, the market has returned on average roughly 3% in the fourth quarter, despite what happened in September or even the year for that matter. In addition, we’re heading into an election year, which typically bodes well for the stock market. What’s peculiar is that during the third year of the presidential stock market cycle the market historically returns 12%. We start the final quarter way behind the ball, so we shall see if Santa can bring us a market rally to windup the year.
Our Website
Please check out our newest webpage called the Knowledge Base. This page is dedicated to all things personal finance. From educational videos to smart device apps, we have pulled together trusted resources for you. If you don’t see what you’re looking for, please contact us to let us know and we’ll help you find the answer.
Year-End Tax Items
As we head into the fourth quarter, now is the time for tax planning. The 401k limits were raised to $18,000, so if you’re planning to max out your contributions for the year, please check your contributions. Do you have a flex spending account? If so, please remember to plan properly to maximize your tax benefits. If you think you’re going to owe taxes, consider adjusting your tax withholding on your paycheck now for the remainder of the year.
As always, we are here to help so feel free to contact us if you have any questions or concerns. Also, be sure to follow us on social media. We can be found on Facebook, Google+, LinkedIn and Twitter.
Eric Lai & John Wenzel | Archvest Wealth Advisors