Wealth Management - Third Quarter 2021 Review

Posted by Will Burnett on Oct 27, 2021 5:04:01 PM

Owner Resource Group is pleased to provide the following wealth management insights from Round Table Wealth Management.

Third Quarter 2021 Review

Dear Clients and Friends,

We hope you had a wonderful summer and were able to gather with family and friends once again. As the world emerged for summer vacations, capital markets were relatively calm. However, issues brewing under the surface for much of the year including inflation, a Federal debt limit impasse, supply shortages, shipping logistics and labor shortages all drew increased scrutiny in investors’ minds during September, contributing to heightened volatility within markets. Despite these post-Labor Day headwinds and setbacks, capital markets have performed well year-to-date, generating a return of 15.9% for the S&P 500 through September 30 while the bond market is down approximately 1.6%.

Following the strong trailing returns and with more risks on the horizon, we believe equity and bond market returns will likely be more moderate over the short to intermediate time horizon. Since April 2020, investors have reaped the benefits of equity exposure as earnings and valuations have surged to record levels. The market’s rebound off the bottom and today’s high valuations are consistent with prior recoveries post-recession. Historically, during a recovery, market valuations gradually subside as earnings regain momentum. Today, however, valuations remain high and operating earnings are also at historically high levels. For valuations to revert along historical patterns, earnings growth will necessarily need to continue its current trajectory. We are constantly evaluating new data as it becomes available and considering how it will impact our investment outlook. Consequently, while our portfolio positioning has not materially changed since last quarter, new developments across macro factors may lead us to alter allocations and risks in the near-term. Please reach out directly to your Wealth Advisor to discuss our outlook or any concerns you may have.

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Topics: Wealth Management