Stocks finished October lower as investors navigated Q3 earnings, the upcoming election, and uncertain Federal Reserve policy. The S&P 500 posted its first monthly loss since April, lowering its year-to-date return to +20.7%. Large-cap stocks slightly outperformed small-cap stocks, but most investment factors produced similar returns.

The economy is in uncharted territory. Figure 1 graphs the Leading Economic Index (LEI), which tracks ten data points that tend to change before the overall economy does. Economists monitor the LEI because it includes data that can provide insight into future economic activity, such as unemployment claims, building permits, and manufacturing hours worked.

The major development in 3Q24 was the Federal Reserve’s decision to cut interest rates by -0.50%, the first rate cut of this cycle. It came as the Fed shifted its focus, with unemployment rising to a 33-month high and inflation moving back to target. In the equity market, stocks ended the quarter higher despite some turbulence, including a brief but sharp sell-off in early August. The S&P 500 posted its fourth consecutive quarterly gain and ended September near an all-time high.

We are launching Walden Ways Financial Coaching service as a way to provide a structured process for helping clients make the behavioral changes necessary to live into their financial purpose and financial plan. Clients will choose a set of goals for the Coaching service either from their Walden Roots work or from a detailed Service Description, and the Coaching will commence until the specified goals are achieved making the process both client-specific and measurable.

While elected leaders can influence economic growth by enacting laws and regulations, data suggests that who occupies the White House has little to no impact on investment performance. Fundamental factors like corporate earnings growth and valuations impact the stock market far more than political headlines. Politicians make many promises during election years, but these often go unfulfilled because of the government’s system of checks and balances. Moreover, the economic outcomes of policies are less predictable than officials think, with the economy more influenced by factors like job growth, interest rates, and inflation.

Stocks traded higher in August despite an early-month selloff. The S&P 500 dropped over -5% in the first week after a report showed unemployment rose to 4.3% in July. Small-cap stocks underperformed as investors pulled back from riskier assets amid volatility. However, financial markets quickly stabilized and climbed throughout the month.

How do we teach our children about money while they are bombarded with messages and stereotypes about what it means to be rich, poor, stingy, generous, needy, disciplined, careless, and careful? The importance of money in our lives is a concept that is deeply personal and plays out publicly based on what we spend money on. And believe me, they are watching.

The stock market had a strong start this year. The S&P 500 gained over +15% in the first six months, its 16th strongest first-half return since 1931. The equity market’s rise continued into early July, and the index set a new all-time closing high on July 16th. However, the stock market experienced increased volatility as it traded lower over the past few weeks. The selloff accelerated in the first week of August after a report showed unemployment rose to 4.3% in July, a nearly 3-year high. The recent volatility has been a notable change from the first half’s steady climb, with the S&P 500 at one point -8% below its all-time high from mid-July.

The S&P 500 ended July slightly higher, its third consecutive monthly gain. The index initially traded higher and briefly surpassed 5,600 for the first time before it traded lower in late July and gave back some of the gains.

The stock market had a strong start in the first half of 2024. Figure 1 compares the S&P 500’s year-to-date return against its average annual return path since 1931. It shows returns for the first half of the year were above average, with the S&P 500 already surpassing its average full-year return. In Q1, the S&P 500 set 22 new all-time highs after not setting a new high since January 2022. There was a -5% sell-off in April, but the S&P 500 recovered by mid-May and set new highs in late Q2. By the end of June, the S&P 500’s +15% return ranked as the 16th strongest first-half return since 1931. It was also more than 7% above the average full-year return, despite only being at the mid-year mark.

The topic of interest rate cuts continues to dominate the financial markets. Investors are focused on when the Federal Reserve will lower rates, all while keeping a close eye on corporate earnings and valuations. Economists are analyzing inflation and labor market data to determine their impact on the probability and timing of rate cuts. Speeches by Fed members and minutes of recent Fed meetings have received greater scrutiny as investors search for clues about the central bank's next steps. This letter recaps the second quarter, discusses investors’ focus on the Federal Reserve, and looks ahead to the remainder of 2024.

Choosing a fee-only fiduciary financial advisor means selecting someone who is legally and ethically committed to putting your financial interests first. This trust-based relationship ensures that the advice you receive is designed to help you achieve your financial goals, free from hidden conflicts of interest.

The S&P 500 Index is a well-known stock market index that tracks the performance of 500 of the largest U.S. companies. Many large-cap ETFs passively track the broad index, and investors use it as a benchmark to gauge the relative performance of their portfolios. This year, a unique phenomenon is impacting the S&P 500. A single stock has contributed over one-third of the S&P 500’s total return, which means its inclusion or exclusion in different market indices has made a big difference.

We help people at the top of their game define wealth, articulate a vision for their future, identify their values and goals, create a plan to achieve their objectives, and hold them accountable for the actions required to achieve what they have defined as “success.” We refer to this process as living out one’s “financial purpose.”

When asked, “What is the biggest mistake we make in life?” the Buddha replied, “The biggest mistake is you think you have time.”

The S&P 500 set a new all-time high in May after trading lower in April. The technology-heavy Nasdaq 100 Index gained +6.2% and set a new all-time high, with mega-cap stocks like Nvidia, Apple, Microsoft, and Facebook-parent Meta leading the recovery.

You have likely seen headlines and news reports discussing artificial intelligence as a major technological advancement. AI’s potential to transform everyday life has people talking about its use cases and the stock market buzzing about new investment opportunities.

Tell me a story about your first memory of money and the role it plays in life. When I crafted this question for the Walden Roots intake survey, I had no idea of depths it would reveal.

When I started Walden I had a clear vision for the firm. I want Walden to be more than a Financial Advisory firm. As the mission of the firm states, I want to inspire my clients to live with intention and purpose, and I truly mean that.

I launched Walden Financial in 2020 with this mission statement: to enrich our clients lives by inspiring them to live with intention and purpose. I worked hard on curating that statement. It was important to me to capture exactly the kind of financial practice I wanted to create and what it would mean to my clients to do so.