As we wrote several months ago, we expected October to be a volatile month because of the government shutdown, debt ceiling debate and a new Federal Reserve Chair nominee.
We also were confident we would see “Oscar-worthy” performances from both sides of the aisle and that the rhetoric would roil the financial markets.
With no resolution in sight for any of the three key issues, the expected volatility is in full swing.
Our views on the situation are as follows:
(These views are not predictive of any market performance. They are only the opinions of LWA at the time of this writing and are subject to change.)
- The volatility may be temporary and could give way to a recovery as soon as the three key issues are resolved.
- While it seems that the parties involved are nowhere near a deal, we believe there will be a resolution. The market activity is reflecting this point of view as well.
- The rhetoric will likely get worse before it gets better.
- We cannot foresee a situation in which the United States of America would default on its debt or fail to make payments on it, although it may be the 11th hour before a resolution is reached.
- Once we move past the current turmoil, the end of the year could see an upward trend in equities. Any near-term losses could be quickly offset with a rally on news of a resolution.
- At this time we are not planning significant shifts in terms of portfolio strategies. However, if the situation does not unfold as we expect (i.e. the unthinkable happens and we default) we will take appropriate measures in our actively managed accounts. Bear in mind, at this time we remain underweight in bonds and overweight in cash in most of our allocations.
Lowe Wealth Advisors is an SEC registered investment adviser with its principal place of business in the State of Maryland. Lowe Wealth Advisors and its representatives are in compliance with the current notice filing and registration requirements imposed upon registered investment advisers by those states in which Lowe Wealth Advisors maintain clients. Lowe Wealth Advisors may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. For information pertaining to the registration status of Lowe Wealth Advisors, please contact Lowe Wealth Advisors, or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov).
This commentary is intended for the dissemination of general information regarding market conditions to Lowe Wealth Advisors clients. The information contained herein should not be construed as personalized investment advice. Past performance is no guarantee of future results, and there is no guarantee that the views and opinions expressed in this report will come to pass. While any general market information and statistical data contained herein are based on sources believed to be reliable, we do not represent that it is accurate and should not be relied on as such or be the basis for an investment decision. Any opinions expressed are current only as of the time made and are subject to change without notice.
- Not all portfolios are actively managed. If you have a question about how your account is being managed please contact us.
- No diversification can completely protect against market risk or other risk factors with investing. A diversified portfolio could still lose money.
- An Index is a portfolio of specific securities (common examples are S&P, DJIA, NASDAQ), the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. Past performance is not indicative of future results.
Foreign investing carries additional risk such as currency risk, political risk and different accounting standards.
*Lowe Wealth Advisors is a registered investment advisor.