September stock markets closed on a steady down track, then jumped to a strong start opening October. Again both stocks and bonds fell last month, with all investment markets down double digit year-to-date and from a year ago. The major stock indices average dropped over -8.4% with nearly all market sectors declining last month. A portfolio of stocks and bonds reduces the sting of a drop in stocks, even when bond values also drop.
While long term investments are at sale prices, no one knows if they will yet drop more as the threat of recession still looms. The surge and step back in stocks and bond prices in early October suggests a healthy market but not a confident one. Wanting to keep a little extra cash on the side for now makes sense. Smaller local banks have raised interest rates to depositors. That keeps the cash available when it makes sense to invest long term again. This is also a very good time to take advantage of bargain prices for the long term without timing the market. Making small, regular, monthly investments is a no cost process called Dollar Cost Averaging and works best in times of turbulent markets. This can be set up electronically to run every month, good times and tough ones, to begin and end when you decide. Stacie is happy to explain this investment strategy to you when you meet.
Summer really slammed the door on its way out this year. Winter birds hungrily empty the feeders. Hardy herbs, asters and dahlias revive with the lawn in this rainy spell as maples begin to turn in our corner of New England. The turbulent weather across the world has taken a toll with lives lost and homes destroyed in the path of suddenly violent storms. It is a global warning.