The third quarter of 2023 saw a decline in values across all asset classes which comes on the heels of gains earlier in the year. Much of the decline last quarter was due to investors feeling less optimistic about the direction of interest rates. The Federal Reserve stated that due to the economy’s continued strength, future interest rate increases may still be warranted. Whether interest rate increases come to fruition or not will depend on how a number of economic indicators unfold over the coming months. Only time will tell what happens next, so our recommendation is to be patient and to remain a disciplined investor. After all, short term changes in the economy and the markets are to be expected, and they end up being of little concern to the long term investor.
While it’s never fun to see our portfolios decline in the short-term, we should keep in mind that if we look back over the past year we see some tremendous returns including gains over 20% in the US stock market. Think about all those stock dividends you earned last fall – they were reinvested at bargain prices and have grown quite nicely over the past 12 months.