Review & Outlook

Our current return expectations for balanced portfolios continue to be in the range of 4.7%, actual results have done better. With average Carderock stock portfolios up 27% Year-to-Date and 11% since their highs 12 months ago, we find ourselves happy with another third quarter close. Unsurprisingly, we feel a degree of trepidation on opening the fourth quarter given the denouement last year, and post that we will do our best to avoid another “Ground Hog Day” event.

As detailed in the following pages, we believe our worries have merit, but we’ve kept these leashed for now and allowed the markets to run. With a few small adjustments made during the past three months, we would like to think they’ll prove the elixir to keep a sniffle from turning into a cold. Yet we know these “vaccines” aren’t expected to eliminate the effects of exposure so much as to build early defenses to assure a quicker recovery.

While in recent weeks we’ve kept our powder dry, we have begun reviewing portfolios with an eye towards lowering equity exposure (raising cash) as we begin the new quarter. Though market trends will dictate our pace and magnitude of effort, our focus remains on seizing the opportunities presented while keeping the balance required to meet your objectives. Should the fourth quarter follow last year’s path, we’ll find ourselves at a good place to start and on solid ground for an opportunistic reset in 2020.

As always, we invite you to give us a call to discuss these matters further, review your portfolio and update the specifics of your Investment Plan.

James W. Mersereau, CFA, CIC
President

Daniel A. Kane, CFA, CIC
Managing Director