Market Update September 2019


August lived up to its historic reputation as one of the worst-performing months of the year for the stock market, as the S&P 500 index fell by about 1.5% last month, basically erasing July’s gains. Interestingly, for as great as 2019 has been for the S&P 500, the index is only up about 3% for the 52 weeks ended August 31. For contrast, the Barclays Aggregate Bond Index is up about 10%! Bonds have had a great year as interest rates have fallen.

From here, I remain cautious about portfolio allocation. There are some tailwinds, including those low-interest rates. As you can imagine, there are fewer takers for a 30-year US Treasury bond at today’s rate of 2.02% than there were back last November when the same bond yielded 3.45%. So, perhaps some of those bond buyers will look at dividend-paying stocks, instead. Also, consumer confidence remains high and, despite the slow summer, the trend for stocks is still higher. The rest of the picture is cloudier. After many years of decreasing initial jobless claims, the number has ticked higher recently. Transportation indices are lower, indicating that fewer goods are being shipped. GDP, the very broad measure of economic growth, is being revised lower. The strong US Dollar also creates a headwind for corporate profits.

For these reasons, I’m proceeding with caution. For new money coming in, we are buying on dips, which seem to come about every other day! I like technology, health care, and communications-related stocks right now, and I’m underweighting utilities, consumer staples (like groceries) and basic materials. Likewise, we have become more active in profit-taking when stocks do run-up. After the rally this year in bonds, I’m also waiting to buy fixed income on dips. Alternative strategies seem to make a great deal of sense, as they may allow portfolios to have an investment that is not correlated to stocks or bonds, or may put some protection on a portfolio. They can be tricky, so if you have any questions about them, please let me know.

I think now is a great time to revisit your risk tolerance, especially as it relates to your goals. If you have not made a Signature Life Plan with us, I highly recommend it. The plan will give you insight as to what sort of investment portfolio you need to help meet your financial needs and desires, and will alert you if you are taking too much or too little risk. That’s a great start when we’re trying to match your portfolio up to your risk tolerance, and may help you keep market turbulence in perspective.

I hope you enjoy September. I, for one, am glad to see the return of college football and I’m hopeful for cooler weather. If you have any questions about your portfolio, please don’t hesitate to give me a call or send me an email.

As always, these recommendations are mine, and may or may not be the same as those of Raymond James. This is not a solicitation to invest, although we do invite you to review your portfolio with us to see if any changes should be made.




Past performance may not be indicative of future results. There is no assurance any of the trends mentioned will continue or forecasts will occur. Investing involves risk including the possible loss of capital. Asset allocation and diversification do not guarantee a profit nor protect against loss. The foregoing is not a recommendation to buy or sell any individual security or any combination of securities.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Individuals cannot invest directly in any index. The Barclays Capital Aggregate Bond Index is a broad base index, maintained by Barclays Capital, which took over the index business of the now defunct Lehman Brothers, and is often used to represent investment grade bonds being traded in United States. Index performance does not include transaction costs or other fees, which will affect investment performance. Individual investor results will vary. Dividends are not guaranteed and must be authorized by the company’s board of directors. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. International investing involves special risks, including currency fluctuations, differing financial accounting standards, and possible political and economic volatility. The prices of small company stocks may be subject to more volatility than those of large company stocks, and therefore, may not be appropriate for every investor. There are additional risks associated with investing in an individual sector, including limited diversification. Investing in the energy sector involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. Investing in oil involves special risks, including the potential adverse effects of state and federal regulation and may not be suitable for all investors. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Scott Mitchell and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

About Scott Mitchell

AAMS ®, Chief Investment Officer SWG, Senior Wealth Advisor RJFS, Scott is a cum laude graduate of Wake Forest University School of Business. He received additional training from the College of Financial Planning and earned the accreditation of Accredited Asset Management Specialist℠ as well as earning the Accredited Investment Fiduciary® designation.  Scott began his career at Southern National Bank. He then joined his father, Bob Mitchell, at First Union Securities for six years. At Signature, Scott directs investment strategy for the team and oversees the research and management of individual stocks, bonds and mutual funds. Scott lives in Florence with his wife and two children. He is a member and past President of St. Luke Lutheran Church, member and past President of the Florence Rotary Club, and on the board of directors of the Pee Dee Area Big Brothers and Big Sisters. Follow Scott on LinkedIn. Raymond James is not affiliated with any of the above-mentioned organizations.