LifeSteps Financial Market Update | November 2018
A Tough October
Looking Back at October
The S&P 500 lost 6.8% in October 2018 (total return). It was the worst month in more than seven years (since the September 2011 loss of 7.0% ). It was also the worst October since the index fell 16.8% in October 2008, the beginning of the global real estate crisis . The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock's weight in the index proportionate to its market value. Source: BTN Research
October was far from a pretty month for the market. It is important to keep in mind that although it was a painful month, it is not uncommon for the market to make a correction of possibly 10% once or twice a year. 

The chart provides a historic visual that shows corrections every year. When looking at 2017, the correction was very small, comparatively speaking. This lack of volatility has some investors thinking that very little volatility is normal.                       
January Return vs. Subsequent 11-Month Return of the S&P 500 Index
(1926-2017)
In US dollars. Returns are of the S&P 500 Index. Copyright 2018 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Past performance is not a guarantee of future results. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Values change frequently and past performance may not be repeated. There is always the risk that an investor may lose money. Even a long-term investment approach cannot guarantee a profit.
US Large Cap Market Intra-year Gains and Declines vs. Calendar Year Returns
(1990-2017)
In US dollars. Data is calculated off rounded daily returns. US Large Cap is the S&P 500 Index; S&P data copyright 2018 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Largest Intra-Year Gain refers to the largest market increase from trough to peak during the year. Largest Intra-Year Decline refers to the largest market decrease from peak to trough during the year. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Values change frequently and past performance may not be repeated. There is always the risk that an investor may lose money. Even a long-term investment approach cannot guarantee a profit.
It is important to take a long term look at the market. Volatility in one month does not necessarily indicate how the market will react in the following months or finish the year.
Looking Ahead to November
As we begin November, it appears that U.S. stocks have begun to bounce back. There are a few things that could affect the market this month: the election, trade problems with China and the Federal Reserve‚Äôs decision regarding interest rates. We are cautiously optimistic that the market will end in positive territory.
Our View
We are keeping an eye on events that may influence the market, such as tariffs and short-term interest rates hikes, as well as the overall housing market. As investors, not traders, we need to look further into the fall and the end of the year. We still believe that our allocations should tilt away from bonds and outside the U.S exposure. We will continue to closely monitor economic developments, as well as global events that effect the market.
If you have any questions, please contact us.


?Regards,

Henry Ford

LifeSteps Financial      
This report is for information purposes only and is not a recommendation for any particular security. Mention of individual securities should not imply that we own the security or have owned it in the past. In addition, the information provided here should not form the basis for investment decisions. Past performance is no guarantee of future results. This information should not be used in any transaction without the advice and guidance of your Tax Professional. LifeSteps Financial has not independently verified, or attested to the accuracy or authenticity of the information, including any investment performance measurement.
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