The third quarter proved to be a positive one for investors, despite the continued onslaught of dreadful news from politicians and media outlets alike. The US Stock Market saw an increase of 6.23% with International and Emerging Markets posting 7.30% and 7.74%, respectively. Likewise, the US Bond Market rose by 1.58%, buoyed in part by the Fed’s newly announced commitment of holding rates artificially low through 2015.
Considering all the discouraging news, it’s not surprising that investors plowed three times as much money into bond funds as they did equity funds during September. This is but one sign of continued pessimism, despite an expected 2013 price to earnings ratio for the S&P 500 below the normal level.
This fall could prove to be volatile with the election and the inevitable political infighting concerning the “fiscal cliff.” However, as we have seen, bad news doesn’t necessarily relate to low returns.