As of the close of the third quarter 2018, the S&P 500 index (U.S. Large Cap equities) continued to show dominance over international equity peers. In fact, over the past 10 years, the S&P 500 index has outperformed the MSCI ACWI ex USA index (international equities) in 70% of the calendar years and by 6.2% annualized, the widest margin in the last 20 years.

This performance has caused investors to rightly ask, will the U.S. equity freight train ever stop? History may provide investors some answers.

The dip in the markets earlier this month may have caused some anxiety in investors. Over the course of Wednesday, October 10th and Thursday, October 11th, the Dow Jones Industrial Average and S&P 500 Index dropped more than 5%, marking the largest decline for U.S. equities since this past February.

What began as a modest sell-off across global stocks and bonds last week accelerated sharply Wednesday. In one day, the S&P 500 and NASDAQ indices lost 3.3% and 4.1%, respectively, as the VIX Index, a forward-looking measure of implied volatility, increased by 44%.

The Tax Cuts and Jobs Act (enacted in December 2017) contained a provision with special tax incentives for taxpayers making investments in economically distressed communities. The program ultimately aims to spur economic development and job creation in these communities.

Guest author Brad Steiman encourages investors to use the happiness model developed in the book, Solve for Happy. As an investor, your happiness depends on having realistic expectations about returns and viewing market events in proper context. These two factors can drive your sense of financial well-being and influence your financial outcome.

As expected, Federal Reserve officials raised the federal funds rate 0.25% at their September meeting to a range of 2% to 2.25% and reiterated expectations for another 0.25% rate increase at the December Federal Open Market Committee meeting.

Is today’s bull market really what it seems, or is it more like Ferdinand the bull, which preferred sniffing flowers over fighting?

Suppose you found a mutual fund where the portfolio manager knew for sure which 10% of the largest U.S. companies would earn the highest returns over the next five years, over each upcoming five-year period. The ultimate crystal ball … predicting the future of market returns. You’d invest 100% of your money in that fund and hang tight, right? 

Diversification has been called the only free lunch in investing. This idea is based on research showing that diversification, through a combination of assets like stocks and bonds, could reduce volatility without reducing expected return or increase expected return without increasing volatility compared to those individual assets alone.

At the beginning of 2018, we shared our long-term capital markets outlook along with relevant long-term themes we believe are important to frame our expectations. Now that we are in the second half of 2018, it is time to provide a mid-year update as well as insight into how our thoughts are evolving.