The Stock Market Takes a Breather

Stocks  had  a  slightly  negative  return  in  the  third  quarter,  which  after  5  straight  positive  quarters  is  not surprising.   Actually,  the  majority  of  market  increases  happen  in  short  bursts,  so  this  is  quite  common.   Lately there  has  been  a  bit  more  “nervousness”  in  the  market  over  things  like  the  debt  ceiling,  unemployment numbers,  and  supply  chain  disruptions.   In  the  long  run  that  can  be  a  healthy  thing  to  keep  the  market  from overheating.   The  bottom  line  is  that  with  interest  rates  near  zero,  an  influx  of  government  spending,  and  high consumer  demand  the  environment  is  still  a  good  one  for  public  companies  to  prosper.   The  reason  there  is  an expected  return  premium  for  stocks  over  time  is  because  of  the  unknown  short‐term  returns.
About the Author: Brent Walker

Brent Walker, CFP®, President is head of business operations for WealthPoint Advisors, LLC. His primary responsibilities are business strategy decisions, client communication, investment advice and management, and business development.