Dear Clients and Friends,
Since our last quarterly letter, the U.S. stock market returned 11.3% (as measured by the S&P 500 total return: this includes the impact of dividends on returns) and developed international markets returned 16.5% (as measured by the MSCI EAFE). A solid performance that certainly surpasses last quarter's -12% US return by a significant margin. During the Q2 earnings season that ended in August, 78% of the companies in the S&P 500 exceeded earnings expectations. Despite this strong performance, the market continues to be volatile. Markets continue to be driven by global economic indicators and governmental interventions in fiscal and monetary policies - as opposed to the underlying business fundamentals. Investors are struggling to read the tea leaves and determine if the weak US and global growth will take hold or perhaps relapse into recession.
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