Third Quarter Recap
Despite a challenging backdrop of political and economic headlines, economic growth has remained resilient throughout the third quarter. There has been no shortage of concerns, including persistent inflation, the economic impact of the continued conflict in the Middle East, and heightened volatility in both short and long-term interest rates. Mix in the economic uncertainty and evolving public sentiment surrounding the AI build-out and you would not be surprised if equity markets were down. However, news alone doesn’t drive markets. Instead, corporate profits have been exceptionally strong, providing support for global equity valuations.
Key global equity indices achieved slightly positive returns, as did key commodities like precious metals and energy. In fixed income, investor concerns around inflation, budget deficit financing and corporate debt issuance (in support of AI-related growth) have contributed to a decline in bond prices. Interest rates and prices are inversely related, meaning recent rate increases have also negatively impacted bond performance. On the currency front, the US dollar has continued to gradually strengthen as investors anticipate more hawkish Federal Reserve policies related to inflationary pressures.
What’s Next
The backdrop of challenges and tailwinds in the third quarter will likely continue for the remainder of 2026, but the direction of longer-term interest rates may be the most important indicator to monitor. Higher long-term rates can affect borrowing costs, business investment, housing activity, and equity valuations. Regarding short-term interest rates, markets largely expect the Federal Reserve to continue raising as they attempt to manage their 2% long-term inflation target. For investors, this makes portfolio diversification and risk management increasingly important.
Our Recommendations
Successful investing does not come from correctly predicting the future or perfectly timing investment decisions. It comes from managing emotions during uncertain markets and building an investment strategy that is financially unbreakable.
Having a plan and accepting there will be deviations to that plan are equally as important. While short-term volatility, whether upside or downside, may not mathematically impact a long-term financial plan, the impact from emotional reaction can be significant. Investors will inevitably experience challenging periods, such as the bursting of the technology bubble in the early 2000s and the global financial crisis that followed. At the same time, strong markets may cause investors to become overly optimistic and encourage excessive risk-taking. In both environments, emotions can become an investor’s greatest challenge.
Those who build thoughtful plans and remain disciplined through periods of fear and excitement are more likely to benefit from the power of compounding and the extraordinary long-term growth that has rewarded patient investors over time.
News & Announcements
We are excited to announce two new team members joining Trillium Wealth. Michael DiPretoro has joined the team as a Financial Advisor in Training and Ryleigh Manown has joined the staff part time. Please welcome them to the team!
Have a Question?
Quarterly Commentary
Please contact our office if you have any questions or would like to schedule a review. We look forward to hearing from you!
Our Team of Advisors
Suken Jogani
Founder – Managing Director
Theodore (TJ) Zak, CFP®, AIF®
Founder – Managing Director
Anthony Juliano, CFP®
Founder – Wealth Advisor
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Disclosures
&Partners did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of the author(s) and are not necessarily those of &Partners or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Please consult with your financial professional to determine what might be appropriate for your situation. Past performance is not indicative of future results.
Securities and investment advisory services offered through &Partners, LLC, a broker-dealer and investment adviser registered with the U.S. Securities and Exchange Commission and member FINRA, SIPC.
