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School is back in session, the baseball season is winding down and football is starting. Late summer activities and any last minute vacations are to be had, and it’s a good time to take a look at the markets. The end of summer is typically a lull in the markets, but the end of the year is usually a time of market movement, so let’s check on the health of the economy and the markets:

Summary, Last Qtr:  Markets were generally flat until we hit late August, where the markets dropped in dramatic style. Year-to-date, the market, as measured by the S&P 500, was down -3.89%. The Dow Jones Industrial Average was down -6.52% during the same time frame, and the tech-heavy NASDAQ Composite was down -.05%, having the best year of the three major indices. (Morningstar 9/9/2015) This volatility came on concerns of slowing global growth especially in China, the heels of the Greek economic fallout in Europe, uncertainty about the Federal Reserve raising or not raising rates on top of further decrease in oil prices. All that being said, this drop has scored I the “correction” category so far, which is defined as a 10-15% drop in prices. These corrections typically happen once per year, however, our markets hadn’t experienced once since 2011. And the Fed’s position hasn’t become any clearer given this turbulence and a less-than-expected August jobs report, but a better unemployment rate.

Our Commentary:  As we were overdue for a correction for some time, this correction isn’t too surprising. However, we don’t have a crystal ball that tells us when corrections will happen. That being said, there are a few things we expect in the near term: We expect volatility to continue for at least the short term, as the Fed uncertainty around their targeted September rate hike continues to be debated. Some pundits are speculating that the Fed will hold off until December or even early 2016 to start the rate hike. Oil stocks are grabbing headlines and while the decrease of price at the pump is good, there is real impact on the oil companies and the people they employ, not to mention some of these companies are in the major market indices. This translates into more of the same in terms of asset allocation where asset selection is critical. A broad based strategy is likely to suffer in this environment, making the importance of good investment selection critical. Bonds are in their seemingly endless holding period until we know what the Fed will do, which may not be anytime soon. Despite all of this uncertainly, which leads to volatility, the general economic background is still one that is improving, albeit slowly, and we do not expect a “V” recovery, but we do expect a slow recovery from this market correction.

Our Investment Committee periodically monitors the markets and will continue to provide comments at the beginning of each quarter. Each portfolio is different and we recommend getting individual help, which we are happy to provide.

Best Regards,

-Investment Committee

International Investing:

International investing entails special risk considerations, including currency fluctuations, lower liquidity, economic and political risks, and differences in accounting methods. Past performance cannot guarantee future results.

Bond Disclosure:

Fixed income securities carry interest rate risk. Fixed income securities also carry inflation risk and credit and default risks. Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss.

Forward-Looking Statements:

Certain statements contained within are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties.

Opinions voiced are not intended to provide specific advice and should not be construed as recommendations for any individual. To determine which investments may be appropriate for you, consult with your financial professional.

Indices are unmanaged measures of market conditions. It is not possible to invest directly into an index. Past performance is not a guarantee of future results.

S&P 500 is an unmanaged index of 500 widely held stocks.

Dow Jones Industrial Average is an unmanaged index of 30 widely held securities.

NASDAQ Composite Index is an unmanaged index of all stocks traded on the NASDAQ over-the-counter market.

Neither asset allocation nor diversification can ensure a profit or prevention of loss in times of declining values.