Underneath the Hood While the S&P 500 treaded water (down 0.50%) in the month of September, it was not your average run of the mill month under the surface. For starters, the bond market was far from boring, so stay with us here, bonds are not sexy. Here goes... September was among the worst months for U.S. bonds in a generation. The Bloomberg U.S. Aggregate Bond Index, the broad benchmark for the U.S. investment grade bond market, fell 2.6% for the month. Why? The Federal Reserve raised the federal funds rate by 25 basis points at its September meeting, to 3.75%–4.00%, the first hike since 2023. The vote was unanimous. The hike itself was widely expected, but the reaction was not. Chairman Kevin Warsh described the move as removing a dose of accommodation without saying whether it marked a lasting change in policy, and bond markets sold off. The 10 year Treasury yield rose 82 basis points in the third quarter, 54 of them in September, and ended the month at 5.29%, its highest level since 2002. The 30 year yield reached levels last seen in 2007. 30 year mortgage rates, which are heavily influenced by 10 year US Treasury yields, topped 7% by the end of September. The trend has continued in October, as the average rate increased to 7.40%. How rare was it? A 2.6% monthly loss is a nonevent for stocks, which routinely swing that much. For bonds, it is a rare and significant move. Over the past 30 years, only five months have been worse. Whether or not you understood all of this, we're simply saying it was a rough month for the bond market. Why yields rose Several pressures came together in September: Energy and inflation. Yields have risen since the Iran conflict began, tracking Brent crude, which again topped $100 a barrel in September. Everyone reading this is feeling this at the pump. A strong economy. Resilient growth and full employment also contributed. Fiscal and supply concerns. Growing Deficits and heavy AI related debt issuance added to the upward pressure. Let’s look at it from a glass half full perspective. Simple...higher starting yields mean higher expected returns. The price declines hurt in the short run, but newly invested money now earns far more income than it did a few years ago. How stocks reacted As mentioned earlier, the S&P 500 slipped less than 1% in September and finished the month still holding YTD gains over 12%, but that average hid a wide split underneath. Only technology gained in September and all other ten sectors fell, and the rate sensitive areas were among the hardest hit. The S&P 500 gained 3.8%, but the gains came almost entirely from a handful of names. As crazy as it sounds, a total of 5 stocks (Microsoft, Meta, Alphabet, Apple and Nvidia) accounted for 93% of the gains since July. Surprisingly, as of the end of September, roughly 60% of the S&P 500 stocks were in drawdowns of 20% or more. Additionally, more than a third of the index sat more than 35% from their high. As we write this, the iShares Semiconductor ETF (SOXX) is coming off its 8th consecutive down day. The ETF has fallen more than 14% in that timeframe, erasing over $2 trillion in market cap, as higher interest rates and financing costs weighed on stocks within the semiconductor industry...regardless the fund is still up 70% YTD. While you might take all this as bearish, it also gives us some opportunities Corporate earnings growth is expected to stay robust, albeit at a lower growth rate than in ‘26 but still above historical averages. Markets anticipate earnings to broaden to more sectors beyond a handful of mega cap tech stocks as AI advances begin to impact the bottom line of other sectors outside of technology. With all of the uncertainty - higher interest rates, volatile oil markets, stubborn inflation, geopolitical risks and midterm elections...now is the time to stick to quality. Sector performance tends to rotate, so some of the “unloved” sectors YTD may turn. Just because something has performed well in the past doesn't mean it'll continue to do so. That's why it's important to keep your portfolio balanced and avoid getting too caught up in short term market moves. It may sound like basic advice, but keeping a long term perspective still matters. As always, don't hesitate to reach out if you have any questions or concerns.

Are We Saving Too Much? What Three Generations Can Teach Us About Money I talk quite a bit about market strategy and investing, but I’m also meeting with clients on a regular basis and lately, I’ve started noticing something that sounds completely counterintuitive to almost everything we’re taught about money: Are we saving too much? Forget the so-called “experts” on TikTok pushing the latest scheme or telling you exactly what you should be doing with your money. These are conversations I’m having with real people every day, backed by almost 25 years of actually doing this, and I’m starting to think the answer, at least for some people, might be yes. For most of my career as an advisor, the message around money has been pretty straightforward: Save more, spend less, invest for the future…and generally speaking, that's good advice. But after working with families across multiple generations, I’m not sure it’s that simple. I now see three very different relationships with money. The older generation spent much of its life saving and, and a lot of times, now has difficulty giving itself permission to spend. The generation in the middle (mine) is in the heart of its peak earning and saving years, constantly worried about whether it’s putting enough away for retirement. And the youngest generation seems more willing to spend money today - particularly on experiences - even if that means saving less for tomorrow. So who's right? Maybe all three of them, and maybe all three can learn something from the others. The Older Generation: "We Might Need It Someday" One of the more interesting things we see as financial advisors is that turning a saver into a spender can be surprisingly difficult. Think about the habits someone develops over 40 years. Work, save, invest, don't touch the principal, repeat. Then one day they retire and we're essentially telling them "Okay. Now start spending it."That's a major psychological adjustment. I looked for data on this and here goes…Vanguard found something similar with retirement withdrawal behavior. Roughly one in four didn't touch their retirement savings at all during the five years after leaving their employer. On top of that historical market testing by Vanguard shows a retiree using the 4% rule (essentially the hypothetical idea that you never touch principal) finishes retirement with two to three times their starting wealth. Note, I’m not advocating against the 4% withdrawal rule, it’s my normal “back of napkin” discussion with pre-retirees. But, they are mathematically far more likely to die with an accidental surplus than to deplete their capital. There are perfectly rational reasons. People don't know how long they'll live. They're worried about healthcare. They want to remain in their homes. They want to leave something to their children. But there's another explanation that is harder to quantify…after spending your entire life being rewarded for saving money, spending it can feel like you're doing something wrong. And that's where financial planning can become less about maximizing a portfolio and more about giving someone permission to enjoy what they've built. The Middle Generation: "Are We Saving Enough?" Then there's the generation in the middle…under pressure and doing A LOT. They're paying mortgages, funding college, helping children get started, maybe helping aging parents. They're maximizing 401(k)s, funding IRAs, investing in brokerage accounts and constantly running retirement projections. And despite all that saving, many still don't feel like they're doing enough. For some households that worry is justified. Millions of Americans genuinely need to save more for retirement…but that's not everyone. There is another group, particularly among higher income households, that may eventually discover that the retirement problem they spent 30 years worrying about never actually materialized. This is where eventually the financial planning conversation changes from "Will I have enough?" to "What are we going to do with all of this?”. I’ve watched this firsthand many times. The Great Wealth Transfer Tells Part of the Story Cerulli Associates estimates that approximately $124 trillion of wealth will transfer through 2048, including roughly $105 trillion going to heirs and $18 trillion going to charities. Nearly $100 trillion of the total is expected to come from Baby Boomers and older generations. Obviously, leaving money to children, grandchildren or charity can be a wonderful goal. But that enormous transfer also raises an interesting question. How much of that wealth represents money intentionally accumulated for future generations…and how much represents money people simply never became comfortable spending? There's an important distinction. If your goal is to leave $2 million to your children, that's estate planning. If you end up leaving $2 million because you were afraid to take the vacations, buy the lake house, help your kids earlier or enjoy retirement despite having more than enough resources, that's something different. You may have simply oversaved. The Younger Generation: "I'd Rather Have the Experience" Then we get to Gen Z, and their approach to money can look almost backward to older generations. They seem much more willing to spend today, particularly on experiences and things they can enjoy now. Building a big investment account or accumulating “things” doesn’t always carry the same appeal. But there’s obviously another side to this. You still have to save enough to give yourself options later. Bank of America research from 2025 found that 55% of Gen Z didn’t have enough emergency savings to cover three months of expenses. Only 25% had contributed to a retirement account during the previous year, and just 21% had invested in the stock market. Their actual customer data showed Gen Z’s spending to savings ratio was 1.93, meaning average spending was nearly twice the amount held in savings. So while I think younger generations may understand something important about actually enjoying the money they earn, there’s a balance. So Who has It Right? There's nothing wrong with leaving a legacy but there is something worth thinking about if we spend the first half of our financial lives worrying about accumulating money and the second half worrying about how to give away the money we were afraid to spend. So my answer…probably none of them completely. The older generation understands security, the middle generation understands accumulation, and the younger generation may understand experiences better than either of them. The ideal financial life probably borrows something from all three. Once the math tells you you're okay, give yourself permission to use some of the money. Take the trip while you're healthy enough to enjoy it. Help your children when the money can actually change their lives rather than waiting until they're 60 to inherit it. Buy something you've always wanted. Create memories with your family. Give to organizations you care about while you're alive to see the impact. And yes, leave something behind if that's important to you. The purpose of financial planning shouldn't be to die with the largest possible account balance. It should be to use the resources you've accumulated to create the life and legacy you actually want. Maybe the real financial goal isn't maximizing wealth…it's reaching the end and realizing you saved enough for tomorrow without forgetting to live today. There’s no right answer, but my job is to manage this delicate balance and these are just some things I’ve been thinking about after thousands of conversations and decades in this business.  MP

SpaceX Euphoria and Investor Perspective We don’t often field inquiries about Initial Public Offerings (IPOs) but it is hard to ignore the current hype of the upcoming SpaceX IPO. Why the euphoria? For one, SpaceX anticipates raising a record-breaking $75 billion at a valuation of $1.75 Trillion. The largest IPO in history occurred in 2019, when state-owned Saudi Aramco raised $29.4 billion. Assuming an IPO share price of $135 for SpaceX, their IPO will be 2.5 times bigger than Saudi Aramco’s. Secondly, the offering could lead to Elon Musk becoming the world’s first trillionaire. That’s not a typo, trillionaire with a “T”. As the world's most ambitious tech entrepreneur, he’s either started or been significantly involved in the following businesses: Tesla, PayPal, Twitter now “X”, Open AI -ChatGPT- and SpaceX. He’s changed the world in many ways and investors fear missing out on the next big thing. SpaceX’s IPO is just the beginning as both Open AI and Anthropic (Claude) are expected to launch their own initial public offerings, eyeing valuations close to a trillion, respectively. Each company anticipates raising significantly more than Saudi Aramco back in 2019. It is very likely we will be witnessing the three largest IPOs in history over the next 12-18 months. While SpaceX news is generating the latest headlines, numerous semiconductor and hardware stocks have “lifted off” as well. The Philadelphia Semiconductor Index (SOX) has soared nearly 80% so far this year , marking its best start to a year since its inception in 1993. In April, the index logged a 17-day consecutive winning streak, the longest in 32 years. When Nvidia’s CEO, Jensen Huang declared Marvell Technology would be “the next trillion-dollar company”, the market responded by sending the stock up 32% in a single day. Old-school hardware stock names, Dell and Hewlett Packard, are up 230%+ and 125%+ year-to-date. These impressive and “not typical” returns can easily allow you to bring down your guard as an investor but at times like this, you must also be prepared for the downside risks. A few facts to consider: At $1.77 trillion, SpaceX is being priced at roughly 92 times its annual revenue…..not earnings. 9,365%. That’s how much larger SpaceX’s projected valuation of $1.77 trillion is than its 2025 revenue. In comparison, Lineage, the largest IPO by market valuation in 2024 ($18 billion), had a valuation roughly 240% larger than its revenue. Medline, the largest IPO by market valuation in 2025 ($55 billion), completed its debut with a market value about 116% larger than its revenue. While Starlink is profitable, SpaceX as a whole is unprofitable. SpaceX posted an overall net loss of $4.9 billion for 2025, driven by the immense capital expenditures (CapEx) required for Starship and speculative orbital data centers. A historical study by Truist ( see below ) examined 30 of the most celebrated mega-IPOs in recent memory.. The standout figure? The average maximum first-year drawdown was -55%, while the median first-year return was -9%. (source: Truist Bank - Keith Lerner) Historically, many tech companies operated with extraordinary profit margins as asset-light models but the rise of artificial intelligence and cloud computing is pushing many of these companies into capital intensive, asset-heavy operations. Often, they self-funded their operations but now they are seeking financing by issuing debt. In 2025, five companies (Amazon, Alphabet, Meta, Microsoft and Oracle) alone issued over $120 billion in corporate bonds. This represented a 500% increase from 2024 . The implications of this changing landscape are yet to be known. Will the profits follow the massive spending? Another question that arises is where do the funds to participate in the IPO come from? At the individual retail investor level, it may come from cash. At the institutional level, it likely comes from the sale of other equities or various asset classes, such as Bitcoin. A darling a few years back, Bitcoin is down over 25% YTD and almost 40% lower than it was a year ago. Rebalancing funds from other equities into these IPOs could cause downward pressure on broad market index funds. SpaceX, Anthropic, and OpenAI are undeniably reshaping the future of human technology. But a revolutionary company is not automatically a sound investment at any price tag. This is not to say these companies can’t or won’t be good investments in the long-term, just that the fundamentals will eventually need to match the hype. We are not taking a stance on the worthiness of the underlying investment but you should be prepared for the expected volatility that often follows an IPO. We consistently advise investors to maintain a long-term perspective and equally important, be mindful of risk. This advice applies not only during market turbulence but also when the market’s been on a significant upswing for the last several years. Ongoing risks include high inflation and corresponding elevated interest rates, the Iran War, mid-term elections, stretched equity valuations and CapEx spending. The current risk-reward proposition suggests maintaining a diversified portfolio that fits your actual risk tolerance. The surging market and hype surrounding AI can create illusory shifts in risk tolerance, where you feel your risk tolerance is more than what it truly is. Ultimately, staying grounded in your true risk profile is the best way to capitalize on market growth without compromising your long-term financial security. As always, if you have questions or concerns about your individual situation, please don’t hesitate to contact us.