October 2017 Advisory Commentary

September saw markets provide investors with another upswing in share prices. Volatility was decidedly lower over the month as the only significant pullbacks were seen in the treasury bond arena as well as in precious metals. Real estate firms saw a moderate decline, given their sensitivity to higher interest rates.

The U.S. Federal Reserve seems intent on continuing to raise interest rates as well as to begin the long-awaited runoff of their $4 Trillion balance sheet of treasuries and mortgage bonds that were purchased in the years after the great financial crisis. The negative price movement in the treasury market in September is something that may become a commonly unhappy occurrence to bond investors as the Fed implements its normalization strategy.

Heading into October, we seem to be entering a bit more of a political phase of influence over the market’s movements. The Trump administration is beginning to push their tax reform proposals through Congress, along with various Obamacare fixes. These events will likely be a bigger contributor to the market’s swings as we see the full-on jockeying for position by the various industries and groups affected by the proposed reforms. We believe that the general market has priced in the success of tax reforms becoming law and may be susceptible to a pullback should the reforms not come to fruition as investors expect.

October has historically been a very volatile month for stocks. While we don’t subscribe to these historical analogies in general, it will be very interesting to see if the market’s current dislocations spark any kind of market patterns that can be related to past ones.

Sincerely,

Brian Weckman, RFC
Chief Investment Officer
Actis Wealth Management L.C.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The economic forecasts may not develop as predicted and there can be no guarantee that strategies promoted will be successful.