Market Pulse

September earned only half of its reputation as the worst month of the year. The S&P 500 slipped 0.5% and the Dow fell a steep 4.3%, snapping a five-month winning streak for the blue chips. The Nasdaq bucked the trend with a 1.9% gain. 

The market’s recent performance reflects an ongoing tug-of-war between several powerful forces. On the positive side, corporate profits have remained relatively resilient, consumer spending continues to support economic activity, and enormous investments in artificial intelligence, technology infrastructure, and data centers have provided a meaningful tailwind.

On the other side are persistent inflation pressures, elevated borrowing costs, and geopolitical tensions involving Iran and the broader Middle East. Higher oil prices have become particularly troublesome because they can push up transportation and production costs, squeeze household budgets, and complicate the Federal Reserve’s efforts to control inflation.

On the calendar, history favors investors from here. According to Carson Group, October has averaged a 3.0% gain in midterm election years since 1950 and November another 2.7%. Perhaps most striking, Marquette Associates found that since 1946 the S&P 500    has never ended a midterm year below its October closing low. The logic is intuitive, as markets dislike uncertainty and tend to stage a relief rally once election results are known,   regardless of which party wins.

 Going forward, there is a lot to continue to monitor including third-quarter corporate earnings season, reaction to the Federal Reserve meeting on October 27 – 28, the first estimate of third-quarter GDP in late October, and of course the response as voters go to the polls on November 3. Throughout it all, Treasury yields remain a key pressure point, as long-term rates near multi-decade highs raise borrowing costs for homebuyers, businesses and a federal government carrying growing debt. Furthermore, developments around the Strait of Hormuz, oil prices, and any shift in the balance of power in Congress could all move markets quickly.

Several opportunities stand out heading into year-end. Quality dividend growers such as Coca-Cola and Procter & Gamble offer steady income and have raised payouts through wars, recessions and rate cycles. Integrated energy companies like ExxonMobil and Chevron remain a natural hedge against an oil shock, especially since energy sector earnings are expected to more than double this quarter. Short-term Treasuries, CDs and money market funds also pay a meaningful yield for cash waiting to be deployed.

The road to year-end will likely be bumpy, but the combination of strong earnings, favorable midterm seasonality and a patient, diversified approach gives long-term investors good reason for confidence. Stay disciplined, keep collecting your dividends, and let time do the heavy lifting.

Focus on C.O.R.A. not C.O.L.A.
 
 Recently the Soc Security administration announced that retirees would see an increase of 3.5% in their 2027 monthly checks, up from 2.8% in 2026. While any increase is welcomed by retirees, there’s more to consider than how someone may spend the extra funds.

The 2027 increase translates into an average increase of $73 per month or $876 per year for typical retired workers (1). However, Medicare Part B premiums come directly out of Social Security payments, and those costs are expected to increase by $6.60 a month for 2027. That will make the average Social Security increase closer to just $66 a month. This trivial amount is easily consumed by higher fuel and grocery prices, not to mention medical costs that are expected to increase by an average of 5.4% for the next decade (2). 

Most news stories will focus on that COLA number and its financial translation for people, but the real opportunity here is to use COLA to discuss what I term CORA, or  the Cost of Retirement Adjustment. The cost of living goes up a few percentage points a year, yet the cost of adjusting to retirement can hit you all at once, and nobody sends you a check for that!

The concept of CORA is designed to raise awareness around the personal cost of adapting to retirement including the things people lose, need to replace or rebuild when work is no longer the organizing force in their lives. These are the things not listed on your pay stub like identity, routine, social connection, purpose, and accomplishment.

After all, retirement isn’t just a transaction, it’s a major life transition where you have to consider and prepare for more than just the financial side. Running out of money or losing purchasing power pales in comparison to losing or running out of family, friends, good health and time.

For those already retired, CORA offers an opportunity to look back and consider what you learned along the way. What surprised you? What did you lose that you didn’t expect? What took longer to adjust to than you imagined? Your answers may be exactly what a friend, neighbor, or former coworker needs to hear as they approach retirement. Think of yourself as a Retire-Mentor, someone who can share the lessons, challenges, and unexpected rewards of life after work. Sometimes the most valuable retirement advice doesn’t come from a financial expert but from someone who has walked the path.

For those approaching retirement, CORA is a reminder to start thinking more deeply about the question, “What’s next?” As I discuss in my book Retirement Intelligence, that seemingly simple question has several layers. What’s your new direction? Where will you find purpose and passion? What will your mission be, and what kind of legacy do you want to leave? Those aren’t questions easily answered by plans to hit the open road in a new RV or climb the ranks of competitive pickleball. Those activities may fill your calendar, but they don’t necessarily fulfill your life.

So, as the headlines focus on how much more money retirees will receive next year, consider a different calculation. COLA may help protect your purchasing power, but CORA reminds us to protect our personal power: our ability to connect, contribute, grow, and make a difference. After all, the real cost of retirement isn’t just what you spend. It’s what you stand to lose if you stop investing in yourself and the people around you.