Retirement Plan Update, Q3 2025

Market Recap

The U.S. economy put up good numbers in the third quarter, and markets did too.  While inflation has remained stable, the labor market has weakened a bit.  Unemployment hasn’t significantly increased, but it appears those looking for a job are having to spend longer to find one.  With labor market concerns, the Federal Reserve decided to lower interest rates in September, which was welcomed by stock and bond markets.  The bond market expects two more rate cuts this year, followed by more in 2026 – which is only likely if the labor market continues to deteriorate.  Stocks shrugged off any risk concerns and pushed higher through the quarter, resulting in sizable returns in many asset classes.  Once again, the largest companies, especially in AI-focused sectors, outperformed the broader market.  While markets may have more upside, economic headwinds are picking up, leaving little margin for error.

Review Your Investment Mix

Periodically reviewing your retirement plan investment mix is essential to ensure your portfolio stays aligned with your long-term goals, your time horizon, and your risk tolerance. Over time, market changes can cause your asset allocation, which is your balance of stocks, bonds, and other investments, to drift from its original target, potentially increasing risk or limiting growth. Consistently reviewing and rebalancing your portfolio helps you to take advantage of new investment options, and adjust for life changes such as marriage, children, or nearing retirement.  Participants who have chosen to use a target date fund for their investment mix can be assured that their asset allocation mix is periodically rebalanced and the asset allocation mix will hold true to the overall glide path.