Strong September Across Portfolios
September 2025 proved to be another rewarding month for investors. Both stocks and bonds delivered solid returns, and municipal bonds stood out with particularly strong performance.
Doug summarized the month’s results with optimism:
“Across the board, everybody made money. Congratulations. Another great month in what is turning out to be a really solid year.”
This outcome continues a positive trend for 2025, which has been marked by steady gains despite a mix of economic signals.
Bonds Narrow the Gap
All year, many investors noticed that bonds in taxable accounts lagged those in tax-advantaged accounts like IRAs. The difference came down to the performance of municipal bonds compared with other types of bonds.
Taxable bonds rose about 1% in September.
Municipal bonds gained closer to 3%.
This rally helped municipal bonds close the performance gap, showing the value of diversification across account types. For investors focused on tax efficiency, September provided reassurance that patience with municipals can pay off.
Stocks Build on Strength
Equities also had a strong month:
The S&P 500 advanced roughly 3%.
Portfolios saw a wide range of returns for the year to date, from around 2% to about 4%.
The variance reflects how different asset types contributed unevenly to the year’s gains. Tech stocks, in particular, have led the charge, continuing their role as a primary growth driver.
Rotation Updates: Staying Tactical
ACT Advisors uses disciplined stock and bond rotation strategies to adapt to shifting market conditions. September’s adjustments included:
Stock Rotation: The allocation remained in the technology-heavy QQQ index, which has consistently delivered strong results.
Bond Rotation: Longer-term bonds were sold, with proceeds directed into municipal bonds. This move aligned portfolios with the recent momentum seen in municipals, further strengthening their role in diversified bond exposure.
These tactical shifts underscore the importance of flexibility. While long-term strategy remains the anchor, rotations help ensure portfolios are positioned to benefit from current trends.
Entering the Fourth Quarter
With September behind us, investors now move into the final stretch of 2025. The year’s performance has already been strong, and the fourth quarter historically brings both challenges and opportunities.
Doug English captured the sentiment well:
“The temperatures are cooling off, but the portfolio is hot.”
As we approach year-end, investors can look forward to potential tailwinds such as seasonal strength in equity markets and ongoing resilience in bonds.
Key Takeaways for Investors
September’s results offer several important lessons:
Diversification matters. Municipal bonds proved their value by rebounding strongly after trailing other fixed-income assets for much of the year.
Stay flexible. Tactical rotations, such as shifting from longer-term bonds to municipals, can capture emerging momentum without abandoning long-term discipline.
Expect variance. Portfolios with different allocations may perform differently, but positive results across the board highlight the effectiveness of broad exposure.
Keep the big picture in mind. With another solid month in the books, 2025 continues to shape up as a strong year for investors who remain committed to their plans.
As we close out September and welcome the fourth quarter, investors can feel confident in the strength of their portfolios. From the resurgence of municipal bonds to the continued leadership of tech stocks, the balance between long-term strategy and tactical adjustments is paying off.
The message from ACT Advisors is clear: remain disciplined, stay diversified, and keep focused on the future.
With the holidays on the horizon and markets entering a historically active period, clients can look forward to finishing 2025 on solid financial footing.
