Sage Advice Quarterly Market Review 3Q2005

The markets weathered a stormy third quarter with mixed results. Equities proved resilient with all major segments of the market showing positive return and the S&P returning 3.61% for the quarter. While yields trended down for most of the quarter, bond market results were ultimately negative, not so much for what Katrina and Rita did, but what they didn’t do. The expectations of a Fed pause in interest rate hikes didn’t pan out and proved short-sighted as the Fed not only raised its Fed Funds target rate in September to 3.75%, but sent a clear message that they were more concerned about the energy-driven rise in inflation than the hurricanes’ impact on economic growth.