Bob Graham – Riggs Asset Management Company

Hi there. This is Bob Graham with Riggs Asset Management Company.

Today I want to continue the conversation we’ve been having about what’s going on in the markets.

Since April, we’ve talked about the idea that we’re in a market environment where it’s two steps forward, one step back — two steps forward, one step back. And quite frankly, that still appears to be exactly where we are.

Right now, we’re nearing the end of earnings season, and overall the results have been quite solid across the board.

There have been a few pockets of weakness, particularly in some consumer-related companies, and even some strong companies have experienced short-term pullbacks. But overall, earnings have generally exceeded expectations.

Earlier in the year, we expected we might see a pullback in September, but September turned out to be a fairly good month.

We also thought October might bring some weakness, yet October has also been relatively strong.

Now we’re entering the period between November and May, which historically has been the strongest stretch of the year for the stock market.

There may still be some choppiness in November, but our outlook is that the market should continue to trend higher overall.

A major driver of this trend continues to be the ongoing buildout of artificial intelligence infrastructure.

When we speak with companies across industries connected to the AI ecosystem — including:

• Construction

• Electrical generation

• Water filtration

• HVAC and cooling systems

— we consistently hear that demand remains very strong.

All of these industries play a role in building and operating data centers and AI infrastructure, and many of them are currently experiencing strong growth.

So we believe that the AI investment cycle remains firmly in place.

At the same time, we’re starting to see additional sectors strengthening.

For example:

• Technology continues to perform well

• Financial companies remain strong

• Industrials have been performing well and continue to do so

• Healthcare has recently begun to improve

When you see several sectors strengthening at the same time, that typically creates a healthy market environment.

Because of that, while November could bring some short-term volatility, our overall expectation is that the market will likely finish the year strongly.

Historically, the period from November through May is the strongest six-month stretch for stocks, and that’s exactly the period we’re entering now.

So over the next five to six months, our expectation is that the market will likely continue moving higher, even if we experience occasional pullbacks along the way.

In other words, the same pattern we’ve discussed all year — two steps forward, one step back — may continue.

When we step back and look at the bigger picture:

• Equity markets appear healthy

• Fixed-income markets are performing well

• Interest rates appear likely to trend lower

If interest rates do decline, that would typically provide additional support for stock prices.

So overall, when we evaluate the markets today:

• We believe bond portfolios should continue to perform well

• We believe equity portfolios should also continue to perform well

I realize that may sound a bit optimistic, but from our perspective it simply reflects the continuation of the same trends we've been discussing throughout the year.

We’re looking for a strong finish to the year, and as you’ve already seen, your portfolios are currently performing well and are positioned to take advantage of what we believe could be a solid year-end rally.

Before I wrap up, there’s one more thing I want to mention.

We’ll be sending out a letter summarizing your year-to-date realized gains and losses.

When you receive that letter, please take a moment to review it and feel free to give us a call with any questions.

This time of year can be a great opportunity to review your tax planning strategies before the year ends. By looking at your gains and losses now, we can discuss whether there are any steps we can take to help minimize your tax liability.

So when that letter arrives, please reach out to your adviser and we’ll be happy to talk through it with you.

As always, if you have any questions about this video or anything else, please feel free to contact your Riggs team.

We’re here to help you in any way we can.

Thank you very much.