Below you will find the text from our Q3 Quarterly Client Letter. As always, please feel free to reach out with any questions.

Q3 Quarterly Client Letter:
Enclosed are your investment reports for the third quarter of 2017. The quarter ended with US large cap stocks up 4.5% and small cap stocks up 6% as market volatility declined. Continuing year-to-date trends, international stocks performed better than US stocks and growth stocks outperformed value stocks. Bond returns were broadly positive, led by international bonds.

Momentum appears to be picking back up in the US economy. The economic expansion, currently in its ninth year, has been like a healthy tortoise. Growth has been slow and steady as the unemployment rate has gradually declined from a peak of 10% to 4.2% over the past 8 years. Put another way, the US has now gained 17 million jobs during the expansion (following the loss of 9 million jobs during the 2008-09 recession).

Economists expect an acceleration of US growth for the remainder of 2017 leading into the first half of 2018 fueled by global growth and investment spending. The Republicans’ tax reform plan to lower corporate taxes, repatriate offshore earnings, and lower individual taxes would add US economic stimulus, if it passes.

Despite positive short-term prospects, long-term challenges remain. Tax cuts without spending cuts would add to our already growing Federal budget deficit and debt. Long-term US growth will be muted without higher growth in the working-age population and higher productivity growth.

We’ve written about the resurgent global growth story earlier this year. It’s a story that has been largely overshadowed by devastating natural disasters in recent months. Every major country in the world is, for the first time in recent memory, experiencing manufacturing expansion. In Japan, there are more job openings per applicant than at any time since 1974. Eurozone consumer confidence is at its highest since 2001. And a rebound in demand for commodities, such as oil and copper, has been positive for many developing countries. The global growth story indicates we’ll see global central banks take gradual steps away from monetary policy stimulus over the coming quarters.

On a personal note, we’re pleased to announce that Rebekah and Travis McShane were married in July. It was quite an eventful quarter for Travis, as he earned the Chartered Financial Analyst (CFA) designation after passing the Level 3 exam in June. Say congratulations to Travis next time you see him!

We ask you to compare our report with the account statement you receive from your custodian. If you are not receiving statements from your custodian, please contact us.

Our primary goal is to help give our clients peace of mind about their money and their future. Please don’t hesitate to give us a call if you would like to meet to discuss your portfolio or anything related to your finances. We’ve found that face-to-face meetings are time well spent to better understand your goals and communicate our strategy for meeting your goals.