Beyond the Benchmark: Market Commentary with Darin Richards
ALDRICH WEALTH SHARES A LOOK AT THE MARKET
Equities posted strong returns in the quarter as earnings across the globe continued to impress. Earnings in the U.S. increased more than 10% for the second consecutive quarter, which hasn’t happened since 2011. International earnings, both developed and emerging, grew even faster and consequently stocks internationally outperformed domestic stocks. In a case of déjà vu, domestically, the growth-oriented areas of the market easily outperformed the more defensive sectors. International stocks maintained this year’s dominance and both developed and emerging market returns exceeded domestic returns.
The Fed indicated that another interest rate hike was likely this year and projected three more in 2018. They are beginning to reduce the balance sheet starting in October. Interest rates increased after the Fed’s announcement and bond returns were modest, essentially providing interest but not appreciation.
Investors should anticipate lower domestic returns in 2018 as earnings growth will be more modest unless pro-growth policies are adopted. However, strong earnings growth and more attractive valuations internationally should provide support for above-average returns outside the U.S. Bond investors may face a difficult period if the Fed is able to execute on its campaign to raise interest rates. Historically, bond returns have been below-average during periods when the Fed raised interest rates.
Watch our market commentary video below, featuring Nicole Rice interviewing Chief Investment Officer Darin Richards, to hear more about the market trends this quarter.
Darin joined the firm in 2004, bringing more than 13 years of investment and financial consulting experience with him. As Chief Investment Officer he is responsible for developing, and implementing our investment philosophy and leading the Aldrich Wealth Investment Committee. He works directly with some of our most complex and largest clients and also co-manages the Private Wealth (investments, tax planning, and financial planning) team.
Nicole has dedicated her entire professional career to helping individuals and corporate clients with their financial needs. She has experience working in the areas of wealth management, retirement planning, tax accounting, design and implementation of non-qualified benefit plans, insurance, and qualified benefit plans. Nicole provides investment-related guidance to individuals and businesses to meet their short and long-term financial goals.
Aldrich Wealth, LP (“Aldrich Wealth”) is an investment advisor registered with the U.S. Securities and Exchange Commission. Aldrich Wealth Advisors provides wealth management services where it is appropriately registered or exempt from registration and only after clients have entered into an Investment Advisory Agreement confirming the terms of the client relationship, and have been provided a copy of Aldrich Wealth ADV Part 2A brochure document. The information contained in this document is provided for informational purposes only, is not complete, and does not contain material information about making investments in securities including important disclosures and risk factors. Under no circumstances does the information in this document represent a recommendation to buy or sell stocks, bonds, mutual funds, exchange traded funds (ETF’s), other securities or investment products.
The technical information in this newsletter is necessarily brief. No final conclusion on these topics should be drawn without further review and consultation. Please be advised that, based on current IRS rules and standards, the information contained herein is not intended to be used, nor can it be used, for the avoidance of any tax penalty assessed by the IRS.