As we head into September 2024, it’s time to reflect on the August performance of the stock and bond markets and what this means for our valued clients. Doug English, CFP®, provides a detailed overview of the month’s market activities and strategic adjustments that have been made to optimize client portfolios in his latest video below:
In August, the stock market experienced a dynamic shift. Early in the month, stocks were down significantly, but by the end of August, they had recovered. This recovery allowed many broad stock market indexes, such as the S&P 500, to close the month with a modest gain of around 1%. However, not all segments of the market shared this positive trend. Small-cap stocks remained in negative territory, down about 2% for the month.
Doug English, CFP® explains, “The rotations made a change for September. We had mid-caps in the month of August, and that is switching back into the S&P 500, because that’s where the momentum has been.” This strategic shift underscores the importance of staying agile in the market, adapting to where the momentum is strongest. For many clients, this meant a slight reallocation within their portfolios, moving from mid-cap stocks back to large-cap stocks.
The Bond Market Outpaced the Stock Market in August
For clients with a more conservative investment strategy, August brought favorable news. The bond market outpaced the stock market, with returns ranging from 1% to nearly 2%.
“The rotations made a change for September. We had mid-caps in the month of August, and that is switching back into the S&P 500, because that's where the momentum has been.”
Doug shared that the bond rotation strategy also saw adjustments. “In the bond rotation, we are selling the convertible bonds and buying the preferred bonds that have had a little bit more positive momentum in the month of August.” This move to preferred bonds was driven by their better performance compared to convertible bonds.
Three key Takeaways:
Stock Market Recovery: Broad market indexes like the Dow Jones and S&P 500 ended the month with gains around 1%. Small-cap stocks, however, remained down by 2%.
Strategic Reallocations: Due to changing market momentum, there was a shift from mid-cap stocks back to large-cap stocks within client portfolios.
Bond Market Adjustments: A favorable bond market for conservative investors led to a reallocation from convertible bonds to preferred bonds.
Doug English and the ACT Advisors team are dedicated to helping clients navigate the complexities of the financial markets. With a focus on personalized service and strategic investment management, they are committed to working towards each client’s financial goals with the highest level of care and expertise.
For more information on how ACT Advisors can help you achieve your financial goals, or to discuss the recent market trends, please feel free to reach out. Learn more about our investment philosophy at https://act-advisors.com/fit/.
Doug English is a dedicated and experienced Certified Financial Planner® Practitioner at ACT Advisors, headquartered in Asheville, NC. With a deep understanding of market trends and a commitment to client success, Doug leverages his expertise to guide investors through complex financial landscapes. ACT Advisors is known for its client-focused approach and innovative strategies, helping to ensure that clients are well-positioned to achieve their financial goals. To learn more about Doug, visit https://act-advisors.com/about-us/our-team/doug-english/.