While it was anything but a straight line, the major stock indexes by and large finished the 3rd quarter little changed from where they started. Early August saw some turmoil with the broad stock indexes down in the 6-7% range, as stocks ebbed and flowed with the global trade saga news headlines…

Stocks and bonds continued their ascent in the second quarter of 2019, fueled by the expectation that the Federal Reserve will begin cutting interest rates at their meeting on July 31st…

What a difference three months can make.  At the end of 2018, investors were racing for the exits as stock indexes around the world plummeted.  Three months later, the S&P 500 index booked its best quarterly performance since the 3rd quarter of 2009. 

So much for the proverbial Santa Claus rally.  Historically, the 4th quarter of the calendar year is a positive period for stock market performance, and in particular the month of December.  2018 would have nothing to do with it… 

With the fireworks this week in the stock market, I will focus more attention in this quarterly update to the recent volatility opposed to what transpired in the third quarter of 2018…

As we pass the midpoint of the year, trade wars and tariffs continue to dominate the headlines.  These most recent efforts by President Trump to make America great again through the renegotiation of trading terms with our trading partners has led to not so great returns for foreign stocks.

The 1st quarter of 2018 was notable for the return of volatility in the stock market.  After an incredibly long period of tranquility, large daily gyrations were a common occurrence in February and March.  The long-awaited correction finally arrived, meaning a pullback in stocks of over 10% from previous highs.

Much to the enjoyment of investors, large company domestic stocks defied gravity in 2017 with the Standard & Poor’s 500 index rising 21.8%.  Volatility was virtually non-existent.  According to the Wall Street Journal,

I couldn’t help but to think of the Sonny and Cher classic “The Beat Goes On” last week as I booted up my workstation for the umpteenth time this year to find stocks up to start the day.  More often than not, they have finished the day higher as well, with new highs being a regular occurrence of late.

With the bull market in stocks raging on and volatility noticeably absent, investors are likely to be questioning why they are holding bonds in their portfolios. After all, when stocks are marching higher, bonds are a drag on performance.

The 1st quarter of 2017 was a promising start to the new year, as stocks continued to build on the momentum we saw in 2016.  Foreign stocks in particular started the year hot, and stayed hot, netting solidly positive returns all three months.

2017 is certainly off to a more encouraging start for stocks than last year.  Investors may painfully recall that stocks in 2016 experienced what was reportedly the worst start to a new year in history.  The weakness persisted into mid-February, dashing many investors' hopes in the process.