What’s Next
Asset allocation is important because it helps manage the risks and rewards of investing. In general, investments have different levels of risk and the potential return (or reward) for taking that level of risk is a higher return. For example, investing in stocks typically has greater risk than investing in quality bonds or cash. In return for taking a higher level of risk (i.e., tolerating the ups and downs of the stock market), investors have the potential to earn higher returns. Quality bonds have less risk hat stocks and offer lower return potential, and cash/cash equivalents have the least risk and the lowest return potential.
During the third quarter of 2024—July through September—the stock market offered a lively ride that demonstrated the concept of risk and reward. Major U.S. stock indices bobbed up and down throughout July before dropping sharply in the first week of August when the July unemployment report lagged expectations. The news caused investors to wonder whether the Fed had waited too long to lower rates.
The stock market rebounded over the remainder of the month as inflation continued to trend lower and economic data remained robust. Then, during the first week of September, the number of new jobs created in August was lower than predicted and confidence stumbled again. Uncertainty led to a sharp—and short-lived—decline in stock prices. From that week on, U.S. stock prices trended higher.
Over the quarter, the dips and dives of the stock market made a lot of headlines in the news but by the end of the quarter, stock prices overall had moved significantly higher.
Last week, the S&P 500 Index and Dow Jones Industrial Average closed higher after the U.S. employment report showed 254,000 jobs were created in September. That was well above expectations. The number of jobs created in July and August were revised higher, too. Yields on many maturities of U.S. Treasuries moved higher last week.
WHAT DO YOU KNOW ABOUT HOLIDAYS?
Holidays and the economy are inextricably intertwined. Halloween, Thanksgiving, Hannukah, Christmas, Yaldā Night, Kwanzaa, Mother’s Day, Father’s Day, Lunar New Year, and other celebrations give the U.S. economy a boost because people spend money to observe them. It works the other way, too. The state of the economy can affect how much consumers spend on holidays. When the economy is doing well, people typically have more to spend, and vice versa.
Test your knowledge on the holidays by taking this brief quiz:
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Which of the following events did Americans spend the most on in 2024?
- A) Fourth of July
- B) The Super Bowl
- C) St. Patrick’s Day
- D) Father’s Day
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Americans are expected to spend about $104 per person on Halloween in 2024. Some of that money will be spent on costumes. According to a National Retail Federation survey, which costume ranks in the top five for both children and pets?
- A) Pumpkin
- B) Ghost
- C) Hot Dog
- D) Superhero
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In 2024, back-to-school shoppers (K-12) expected to spend the highest percentage of their budgets on which of the following categories?
- A) Shoes
- B) Electronics
- C) Classroom Supplies
- D) Clothing
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In 2024, back-to-school shoppers (K-12) expected to spend the highest percentage of their budgets on which of the following categories?
- A) Shoes
- B) Electronics
- C) Classroom Supplies
- D) Clothing
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A recent survey found that Gen Xers (44-59 years old) like Thanksgiving and Memorial Day holidays the best, while Baby Boomers (60-78 years old) prefer Memorial Day and Veteran’s Day. Which holidays are at the top of the list for Millennials (28-43 years old)?
- A) Thanksgiving Day and Mother’s Day
- B) Memorial Day and Veteran’s Day
- C) Christmas and Martin Luther King Day
- D) Halloween and New Year’s Eve
Focus – Think About It
“We have seasons when we flourish and seasons when the leaves fall from us, revealing our bare bones. Given time, they grow again.”
IMPORTANT REMINDER: We have an income fund that adjusts its rate on a regular basis that can keep you ahead of inflation and is paying 6.75% on a monthly basis. This would be tax-free in your IRA accounts. Let me know if you have an interest in a possible placement.
Holiday Quiz Answers: 1) d; 2) b; 3) b; 4) a