First, a sincere thank you to everyone who attended our event last week with guest speaker Veronique de Rugy—clearly our best event yet! She was absolutely spectacular, and I wasn’t the only one who thought so—she appeared on national news the very next day.

Are We There Yet? That’s the big question. Between inflation concerns, rising jobless claims, and a mixed bag of economic data, can the U.S. economy avoid a recession—or are we still heading toward one?

While no one has a crystal ball, what’s clear is that momentum in the stock market is up. More importantly, there’s been a noticeable shift: instead of just the “Magnificent 7” or large-cap tech driving returns, broader participation across sectors is finally happening. This has been a recurring theme in my recent updates, and it’s a healthy sign for the market.

Interestingly, investors remain skeptical about this rally’s staying power. Despite falling interest rates, many have held back. There’s now a record $7.7 trillion sitting in money market funds. That’s not surprising—money market funds are yielding around 4.1% annually (as of August, per Crane’s Index), compared to a national average of just 0.6% for savings accounts (Bankrate). In some cases, the yield differential is even more dramatic—over 680% higher than bank savings. It makes sense that investors are holding on to some cash.

So, What Do We Do Now? Even with this broader market participation, it’s wise to take a balanced approach.

• For those fully invested: consider trimming positions where appropriate, especially if in a retirement plan to avoid capital gains. Realizing gains in 2025 might prepare you better for opportunities in 2026 and beyond as you have funds to add to any asset class that may be on sale not just stocks.
• For those with high cash positions: we’re happy to help you reallocate strategically. With markets near all-time highs, we prefer using below-market limit orders to buy quality names and sectors at better value.  The focus would be in industry groups or international markets you may be underweight in.
• For retirement accounts: You have the flexibility to adjust risk without worrying about tax consequences—take advantage of it.

In summary, hold onto your stocks as your core risk asset, but don’t underestimate the value of cash—especially if it can position you for opportunistic buying later. A rainy-day fund isn’t just for emergencies—it can also be a source of strength during a market correction.

Keep an Eye on the Economy: We’re walking a bit of a tightrope. Inflation is rising again even as the labor market shows signs of softening. This divergence is critical—it’s the key signal to watch for potential trouble ahead.

While the Federal Reserve recently cut rates by 0.25%, the market had already priced that in, so the response was muted. But the 10-year Treasury yield tells a more complete story: it peaked at 4.8% earlier this year and has since dropped to around 4.1%. That’s a helpful benchmark to monitor as it reflects sentiment around growth, inflation, and future Fed actions.

Looking Ahead: 2026 Planning Starts Now: As we approach the end of 2025, we’re beginning cash flow and financial planning reviews for 2026. Let’s schedule a time to review your goals—short-term, long-term, or both—and make sure your strategy reflects where you are and where you want to go.

As always, we’re here to guide you with thoughtful analysis, proactive planning, and a calm hand through uncertain times.