Stock prices continued their quiet grind higher in the third quarter. Our current bull market is now eight and one-half years old, the second longest on record. The daily average change in the S&P 500 index of large US stocks was only 0.3% during the third quarter, the lowest since 1968.
Foreign stocks continue to outgain US equities. Economic activity has strengthened overseas, especially in Europe (at long last). Investors have reacted by pulling money out of the US and pouring it into international stocks. A good portion of that money is going to Emerging Markets where stocks are having a banner year.
The month of September is typically the worst performing month of the year, but stocks ended September at an all-time record high. That is only the fourth time record highs were achieved on the last day of September and the first time since 1996. US Stocks have now set 43 record highs in 2017.
The Federal Reserve announced they will reduce their bond holdings beginning in the fourth quarter of 2017. The plan to let their bonds mature and not reinvest the proceeds. The slow pace they announced is unlikely to have a significant near-term effect on long-term interest rates. They also indicated they will likely raise short-term interest rates again in the near future
It is not easy to tune out the flow of constant information, especially about finance and investments. Acknowledgement that the future is unpredictable and prices reflect all current knowledge is a sound foundation for disciplined investing.