I"m optimistic. We are entering the 4th quarter of the year, and typically the last quarter of the year tends to be strong. Over the last twenty years the 4th quarter has produced positive returns 80% of the time and I like those odds. I also like where we are with interest rates, Fed accommodations, money flows, and corporate earnings. It’s all positive for equity investors. Yes, there are some speed blocks on the horizon such as higher taxes and debt ceilings, but the underlying bullish forces are stronger in my view. I also like the demographic data. In fact, the largest population ever, the millennials, had their oldest members turn 40 this year while the youngest of the group turned 25 years old. Good things tend to happen for an economy when you have a large demographic with earning power that produces more goods and services then they are consuming. It is no coincidence that the demand for housing is exceptionally strong, since many young adults are moving out of their parent’s house or their apartment and buying their first home. With the cost of borrowing at historic lows and the national median apartment rent index increasing over 16% since the beginning of this year, there is a strong case to buy vs. rent. The latest Case-Shiller home price index posted a 19.7% annual gain in July. Home prices are now over 40% higher than the last peak in 2006. We don’t believe this trend will continue at the current pace, but increased demand should support current home prices for quite some time. Interest rates are beginning to show signs of life again as the Fed begins to taper their bond purchases and slowly pull back on their accommodative stance. However, the economy is likely much stronger than what most people believe and has the potential to be even stronger in a post-pandemic environment. Imagine life and business without COVID-19, without gathering restrictions, without travel restrictions, without supply constraints, and without fear. It is not that far off. Now, combine that with all the new advancements in technological productivity that we have quickly adapted to, meaning doing more with less. That, my friends, is a recipe for an economic boom. So, stay tuned and stay invested. One final note I would like to share with you. In the third quarter, Ranch Cap had three referrals who were each the mother of the referrer. I can’t think of a better KPI (key performance indicator) to track which illustrates the types of ideal relationships we strive to have with our clients and friends. When someone sends their mom to work with us, that act of trust is received with an abundance of honor and gratitude, and we will work just as hard for the client’s mom as we do for our own moms.
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