MSCI All Country World Index with selected headlines from Q2 2024
LAST QUARTER (Q3 2024)
"UK's Labour Party Wins Election Landslide as Conservative Vote Collapses"
"Deeply Divided France Risks Unprecedented Deadlock After Election Shock"
"Trump Rally Shooting Marks Dark Day in American Politics“`
"Major Tech Outage Grounds Flights, Hits Banks and Businesses Worldwide"
"Economic Growth Quickens, Rising at 2.8% Rate in Second Quarter"
"Biden Drops Out of Presidential Race, Endorses Harris"
"Unraveling Trades Fuel Global Market Rout"
"Japan’s Nikkei Suffers Worst Day Since 1987, Hit by US Concerns"
"Growth Fears Rattle Markets; Nasdaq Suffers Correction"
"Bank of England Cuts Rates After Fed Held Off"
Graph Source: MSCI ACWI Index MSCI data © MSCI 2024, all rights reserved. Index level based at 100 starting January 2000. actual portfolio. Past performance is not a guarantee of future results. See Disclosures for additional details.
"US Job Market Was Weaker Than Previously Reported, Data Show"
"Japanese Leader Fumio Kishida to Step Down"
(Q4 2023 – Q3 2024)
"Stocks Extend Ugly Week of Losses Amid Economic Uncertainty"
"Trump Safe After Another Apparent Assassination Attempt"
"Fed Cuts Rates by Half Percentage Point"
"The Fed's Bold Move Jolts Global Markets"
"US Officials Conclude Middle East Peace Deal Out of Reach During Biden’s Term"
"Congress Approves Bill Averting Government Shutdown Before Election"
"China Tries to Jolt Ailing Economy"
It is not possible to invest dire ctly in an index. Performance does not reflect the expenses associated with management of an
QUESTION OF THE QUARTER
Michael Hughes, CFP® Resident in Financial Planning
The average return for US presidential terms was 9.5%.
The S&P 500 has consistently grown in value over the long term, no matter who’s in office.
Every four years, the uncertainty surrounding the presidential election and potential policy changes raises concerns for many of our clients. The 2024 election is no exception, as we’ve been asked numerous questions about its possible impact. One question we frequently hear is:
"What are you doing to prepare my investments in case __________ wins the election?"
You’ll notice we left the name blank because we're hearing this same question from clients on both sides of the political aisle, with only the candidate's name swapped.
American politics often involves both hope and fear, and this year, many election strategies are based on stoking fears to motivate voters. If you’re feeling anxious about the outcome – rest assured, you're not alone. It’s common for investors to seek a connection between the outcome of presidential elections and stock market performance.
When making investment decisions, fear is not your friend. Will the stock market experience some volatility between now and 2025? Most likely. But we’re prepared for that.
Your investments are managed around the known dimensions of expected returns according to your own needs and risk appetite, not the opinions of media about what will happen next week or month We’re staying disciplined within the asset allocation – the mix of stocks and bonds in your portfolio – we chose for you. We’ll continue to regularly rebalance your portfolio, which involves selling a portion of your most profitable positions and reinvesting in those that are currently undervalued. It’s a key component of our investment philosophy – to proactively respond to and take advantage of market fluctuations.
When you invest in stocks, you're investing in companies focused on serving their customers and growing their businesses, regardless of political leadership.
While a president can influence market conditions, many other factors also play a role, such as foreign policy, interest rate fluctuations, oil prices, and technological advancements. For decades, disciplined investors have seen positive returns through both Democratic and Republican administrations.
The Cost of Trying to Time the Market Missing the Best Consecutive Days US Stock Market Total Return, 1999 - 2024
So, the answer to "What are you doing to prepare my investments in case _____________ wins the election?“ The same thing we've been doing since the day you became a client – staying focused on your goals and what steps are needed for you to accomplish them.
Your investments are well-positioned for whoever wins the upcoming elections.
S&P 500 Index, March 1929 – December 2023
Joe Biden (D)
Donald Trump (R)
Barack Obama (D)
George W. Bush (R)
Bill Clinton (D)
George H. W. Bush (R)
Ronald Reagan (R)
Jimmy Carter (D)
Gerald Ford (R)
Richard Nixon (R)
Lyndon B. Johnson (D)
John F. Kennedy (D)
Dwight D. Eisenhower (R)
Harry S. Truman (D)
Franklin D. Roosevelt (D)
Herbert Hoover (R)
Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Index returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment. Actual returns may be lower. Source: S&P data © 2023 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.
Dating back to John F. Kennedy’s inauguration in 1961, the S&P 500 posted a negative
$4,500,000
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
S&P 500 Performance During Republican Only Presidencies since 1950
S&P 500 Performance During Democratic Only Presidencies since 1950 5.20% Annualized Return
S&P 500 Performance During All Presidencies since 1950 8.13% Annualized Return
Source: S&P data © 2023 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Past performance is not a g uar Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with t he management
negative return during only two presidencies: Ric hard Nixon and George W. Bush.
Regardless of the party occupying the Oval Office, staying invested is the most prudent long-term strategy. Making major investment decisions based on a president’s political party – i.e., being invested only during Democratic presidencies, then moving to cash for Republican tenures, or vice versa –is probably hurting your portfolio more than helping it.
$3,458,874 $444,762 $77,769
THIRD QUARTER 2024
Key Takeaways
• US government bonds posted their longest winning streak in three years, with gains in each month of the third quarter of 2024.
• Bond prices rose, leading to a decline in yields, with the 10-year Treasury yield falling to 3.73% by the end of September.
• The yield curve reversed, with the 10-year yield rising above the 2-year yield, signaling improved market expectations.
Interest Rates Across Issuers (%)
Period Returns
THIRD QUARTER 2024
Key Takeaways
• The US stock market posted positive returns for the quarter and underperformed both non-US developed and emerging markets.
• Value outperformed growth.
• Small caps outperformed large caps.
Ranked Returns
Small Cap Value
Mid Cap Value
Large Cap Value
Small Cap
Mid Cap
Small Cap Growth
Mid Cap Growth
Marketwide
Large Cap
Large Cap Growth
Period Returns
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. See Disclosures for additional details.
THIRD QUARTER 2024
• Developed markets outside of the US posted positive returns for the quarter and outperformed the US market but underperformed emerging markets.
• Value outperformed growth.
• Small caps outperformed large caps.
Small Cap Value
Mid Cap Value
Large Cap Value
Small Cap
Mid Cap
Small Cap Growth
Mid Cap Growth
Marketwide
Large Cap
Large Cap Growth
Annualized Returns World Market Capitalization
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. See Disclosures for additional details.
THIRD QUARTER 2024
Key Takeaways
• Emerging markets posted positive returns for the quarter and outperformed both US and non-US developed markets.
• Value outperformed growth.
• Small caps underperformed large caps.
Ranked Returns
Small Cap Value
Mid Cap Value
Large Cap Value
Small Cap
Mid Cap
Small Cap Growth
Mid Cap Growth
Marketwide
Large Cap
Large Cap Growth
World Market Capitalization
Markets
$9.7 trillion
Period Returns
Past performance is not a guarantee of future results. Indices are not available for direct investment. Index performance does not reflect the expenses associated with the management of an actual portfolio. See Disclosures for additional details.
Past performance is no guarantee of future results. Country returns are the country component indices of the MSCI All Country Wo States, where the Russell 3000 Index is used instead. Global is the return of the MSCI All Country World IMI Index. MSCI inde x returns for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. MSCI Russell Company is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. See Disclosures
rld IMI Index for all countries except the United eturns are net dividend. Indices are not available
CI data © MSCI 2024, all rights reserved. Frank Disclosures for additional details.
Past performance is no guarantee of future results. This information is intended for educational purposes and should not be considered a recommendation to buy or sell a particular security.
Investment advisory services are offered through OLIO Financial Planning, LLC (“OLIO”). This communication is not to be directly or indirectly interpreted as a solicitation of investment advisory services to residents of another jurisdiction unless otherwis e permitted. The contents of this communication and any accompanying documents are confidential and for the sole use of the recipient. They ar e not to be copied, quoted, excerpted or distributed without express written permission of the author. The underlying data has been obtained from sources considered to be reliable: the information is believed to be accurate, but there is no assurance that it is so.
CHANGES TO YOUR SITUATION
Please inform us of any changes to your financial situation, your goals, tolerance for investment risk or other matters relat ing to your personal finances. Please notify us in the future if there are ever any changes to your financial situation or investment obj ectives.
IMPORTANT NOTES
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INDEX DEFINITIONS
Indices are not available for direct investment. Their performance does not reflect the expenses associated with the manageme nt of an actual portfolio. Past performance is not a guarantee of future results. Index returns are not representative of actual portf olios and do not reflect costs and fees associated with an actual investment. Actual returns may be lower.
Cash Equivalents: The Bloomberg U.S. Treasury Bills: 1 -3 Months Index tracks the market for treasury bills issued by the U.S. government with time to maturity between 1 and 3 months. US Treasury bills are issued in fixed maturity terms of 4, 8, 13, 17, 26 and 52 weeks. The U.S. Treasury Bills: 1-3 Months Index is a component of the US Short Treasury Index.
Short-Term Bonds: The Bloomberg US Government/Credit 1 -5 Year Index applies the rules of the Bloomberg 1 -5 Yr Gov/Credit Index, which tracks USD-denominated, investment grade, fixed-rate bonds, including treasuries, government -related and corporate issues, with at least one, and up to, but not including, five years until final maturity.
Intermediate-Term Bonds: The Bloomberg US Aggregate Bond Index is a broad -based flagship benchmark that measures the investment grade, US dollar denominated, fixed -rate taxable bond market. The index includes Treasuries, government -related and corporate securities, fixed rate agency MBS, ABS and CMBS (agency and non -agency). Provided the necessary inclusion rules are met, US Aggregate -eligible securities also contribute to the multi -currency Global Aggregate Index and the US Universal Index.
Long-Term Bonds: The Bloomberg US Long Government/Credit Total Return Index tracks non -securitized securities including investment grade, treasuries, and government/corporate securities. This index can serve as a benchmark for a portfolio or set of securit ies that contain fixed income exposure that matches the characteristics of this index
Corporate Bonds: The Bloomberg US Corporate Index covers performance for United States corporate bonds. This index serves as an important benchmark for portfolios that include exposure to investment grade corporate bonds.
High Yield Bonds: The Bloomberg US Corporate High Yield Index covers performance for United States high yield corporate bonds. This index serves as an important benchmark for portfolios that include exposure to riskier corporate bonds that might not necessa rily be investment grade.
Municipal Bonds: The Bloomberg Municipal Index serves as a benchmark for the US municipal bond market. Investors will use this index to benchmark against portions of their portfolio that are allocated in fixed income securities.
Treasury Bonds: The Bloomberg US Treasury is a benchmark for the United States treasury bond.
TIPS: The Bloomberg US TIPS Total Return index measures US Treasury Inflation Protected securities.
Global Bonds ex US: The Bloomberg Global Aggregate ex-USD Index measures the performance of global investment grade bonds. This index does not include bonds from the US. This characteristic allows this index to serve well for tracking international bond exposure.
Emerging Market Bonds: The Bloomberg Emerging Markets USD Aggregate Bond Index is a flagship hard currency Emerging Markets debt benchmark that includes fixed and floating -rate US dollar-denominated debt issued from sovereign, quasi -sovereign, and corporate EM issuers. Country eligibility and classification as Emerging Markets is rules -based and reviewed annually using World Bank income group and International Monetary Fund (IMF) country classifications.
US Stocks: The Russell 3000 Index is a capitalization -weighted stock market index, maintained by FTSE Russell, that seeks to be a benchmark of the entire U.S stock market. It measures the performance of the 3,000 largest publicly held companies incorporat ed in America as measured by total market capitalization and represents approximately 98% of the American public equity market.
Global Stocks Ex US: The MSCI ACWI ex USA index covers the major developed and emerging market countries. However, it does not include the United States stock market. This is in an important benchmark for investors analyzing how the markets outside of the United States are doing.
International Developed Stocks: The MSCI EAFE Index tracks large cap and mid cap companies in developed countries around the world. The index primarily covers the Europe, Australasia, and the Far East regions. This index is used as an important inter national benchmark. The index has had large drawdowns in 2003 and 2009, which were largely due to recessionary periods.
Emerging Market Stocks: The MSCI Emerging Markets Index captures large and mid -cap representation across 25 Emerging Markets (EM) countries. The index covers approximately 85% of the free float -adjusted market capitalization in each country.
Commodities: The Bloomberg Commodity Total Return index is composed of futures contracts and reflects the returns on a fully collateralized investment in the BCOM. This combines the returns of the BCOM with the returns on cash collateral invested in 13-week (3 Month) U.S. Treasury Bills.
Real Estate: The S&P Global REIT serves as a comprehensive benchmark of publicly traded equity REITs listed in both developed and emerging markets
