One of the most dangerous phrases in the investment community is “It’s different this time”. Looking back on my career in the wealth management industry, a few examples come to mind which validate this statement:
The dot.com era of the late 90’s in which institutional and individual investors were purchasing start-up companies at significant price multiples even though most dot.com companies had no earnings and were reporting significant losses. Some argued that actual reported earnings were no longer important. Eventually the bottom fell out, and we now think of that period as the “dot.bom” era.
Or how about no-documentation mortgages in the run-up before the Great Financial Crisis of 2008? Multiple large institutional lenders, as well as smaller community banks, were willing to forgo documentation when underwriting and approving mortgages for consumers. The rationale was the real estate market was hot, there was a competitive lending environment, and standards needed to be relaxed. Eventually the economy turned, a recession began, job losses incurred, mortgage payments were missed, foreclosures happened resulting in empty houses and lawsuits, and lenders taking possession of homes– it was a mess!
Contrary to the notion of, “it’s different this time”, I’ve always subscribed to the statement that “history has a way of repeating itself,” including within the wealth management industry. Economies both expand and contract, capital markets go up and go down, interest rates rise and fall, just to name a few. Sticking with interest rates, I read an interesting statistic which caught my attention. The Fed lowered interest rates on Sept 17th by .25%, not surprising, while coinciding with the S&P 500 achieving a recent 52 week-high. What most of us don’t know is what happens to market returns after an interest cut has been announced in close proximity to the S&P 500 hitting an all-time high. Check this out – since 1994 (ironically when I started in the industry), there have been 37 rate cuts, 8 of which occurred within 2 weeks of the S&P 500 trading at a 52-week high. In all 8 instances, the S&P 500 was higher a year later with a median positive return of 14.5% - who knew! [1]
How should one process this information? There are three ways to possibly act on it: first, if you subscribe to the “history has a way of repeating itself” mantra, you should feel comfortable that capital markets may continue their upward trend, so you’d keep doing what you’re doing. Second, if you’ve been concerned about the overall volatility and have been overweighted in other asset classes, this statistic may provide you with the catalyst to start transitioning assets into public equities. Lastly, if you are overweight in public equities, you may take this opportunity to begin de-risking your portfolio during a period of market strength - or in other words, sell high!
October will be upon us shortly, and the fall season is my personal favorite. Cooler temperatures, the NHL season’s first games, and the changing foliage are just a few of the reasons. From an economic perspective, the Atlanta FED has a 3.3% GDP forecast for Q3 – the highest among several other local Federal Reserve Banks which publish their forecast. [2] As Regent Peak is based in Atlanta, I am interested to see if they are an outlier or more accurate in their forecasts than other regions.
Thanks again for your interest, and I’ll see you in October.
1 Bespoke Investment Group, Chart of the Day, September 9, 2025
2 Federal Reserve Bank of Atlanta, GDP Now, September 17, 2025 https://www.newyorkfed.org/research/policy/nowcast/#nowcast/2025:Q3
Federal Reserve Bank of New York, NowCast, September 19, 2025; https://www.newyorkfed.org/research/policy/nowcast.html/#nowcast/2025:Q3 (NY 2.1%);
Federal Reserve Bank of St. Louis, Nowcast, September 19, 2025 https://fred.stlouisfed.org/series/STLENI (.047%);
Federal Reserve Bank of Philadelphia, Third Quarter of 2025 Survey of Professional Forecasters, https://www.philadelphiafed.org/surveys-and-data/real-time-data-research/spf-q3-2025 (1.3%); and