Clarity from the election outcome gave equities reason to move higher with the S&P 500 rising 5.7% in November.
Small cap stocks, which tend to perform well in months after an election, rose 10.9% during the month.
International stocks, both developed and emerging markets, posted negative returns for the month, as the dollar surged relative to a broad basket of major currencies.
Inflation rose during October with the annual rate hitting 2.6% for the trailing 12 months according to the U.S. Department of Labor.
Manufacturing growth continues to contract while service industry growth continues to expand according to the most recent survey from the Institute for Supply Management.
Recent economic data suggests that the Fed has successfully engineered a “soft landing” for the economy, managing that fine line between maintaining growth and moderating inflation pressures.
We believe there remains positive, yet slowing, momentum for the US equity markets, particularly in smaller and mid capitalization companies which may benefit from a likely favorable regulatory and merger environment.
International stocks continue to be exceptionally cheap relative to the US, but uncertainties around the recent dollar strength as well as the growth impact of tariffs and trade policy could overshadow attractive valuations.
The Fed is still likely to cut rates in December, but should slow the pace of easing next year, as they digest inflation, jobs, and economic data, as well as the potential policy shifts of the new administration.
We continue to favor broadly diversified portfolios with a blend of lower volatility strategies to moderate equity risk exposures.
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The statements contained herein are based upon the opinions of Bison and the data available at the time of publication and are subject to change at any time without notice. This communication does not constitute investment advice and is for informational purposes only, is not intended to meet the objectives or suitability
requirements of any specific individual or account, and does not provide a guarantee that the investment objective of any model will be met. An investor should assess his/her own investment needs based on his/her own financial circumstances and investment objectives. Neither the information nor any opinions expressed herein should be construed as a solicitation or a recommendation by Bison or its affiliates to buy or sell any securities or investments or hire any specific manager. Bison prepared this Update utilizing information from a variety of sources that it believes to be reliable. It is important to remember that there are risks inherent in any investment and that there is no assurance that any investment, asset class, style or index will provide positive performance over time. Diversification and strategic asset allocation do not guarantee a profit or protect against a loss in a declining markets. Past performance is not a guarantee of future results. All investments are subject to risk, including the loss of principal.
Index definitions: “U.S. Large Cap” represented by the S&P 500 Index. “U.S. Small Cap” represented by the S&P 600 Index. “International” represented by the MSCI Europe, Australasia, Far East (EAFE) Net Return Index. “Emerging” represented by the MSCI Emerging Markets Net Return Index. “U.S. Aggregate” represented by the Bloomberg U.S. Aggregate Bond Index. “Treasuries” represented by the Bloomberg U.S. Treasury Bond Index. “Short Term Bond” represented by the Bloomberg 1-5 year gov/credit Index. “U.S. High Yield” represented by the Bloomberg U.S. Corporate High Yield Index. “Real Estate” represented by the Dow Jones REIT Index. “Gold” represented by the LBMA Gold Price Index. “Bitcoin” represented by the Bitcoin Galaxy Index