Markets have come a long way since the March lows, but we believe there may be more room for stocks to run. Given the impressive economic recovery to date and improving underlying technical and fundamental conditions, we think small cap stocks in particular may have attractive growth potential. Despite election and COVID-19-related risks, we see further gains ahead. Not Out of the Woods, But Improving The significant impact of COVID-19 on the US economy has created unprecedented levels of uncertainty for investors, with a heated election as the cherry on top for 2020. Investors have had a lot to digest since markets bottomed in March, and the virus is not yet under control, but the US economy is certainly in a much better place today than it was in the spring. While we previously have favored large cap stocks due to their strong balance sheets and resilient earnings during this recession, we highlight three reasons we have been warming up to small cap stocks. Early-Cycle Environment Favors Small Caps We believe the latest recession is over and the new economic expansion has begun. The Federal Reserve of Atlanta’s GDPNow updated its forecast to 35% gross domestic product (GDP) growth in the third quarter on an annualized basis, potentially confirming our view that the recession has ended. While we acknowledge the immense amount of uncertainty facing the economy, along with the growing risk that there may be no additional fiscal stimulus until after the election, we stop short of calling for a “double dip” recession. Given our view that we’re in the early stages of the business cycle and a new bull market, we point out that small cap stocks historically

As the saying goes, “50 is the new 40″—and with Americans living longer than ever before, it’s not unusual for those in their 50s, 60s, or even 70s to be in their peak earning years.1 But for those who would prefer the option of an early retirement, it can be helpful to revisit your net worth (and investment strategy) at each milestone age to make sure you’re on track. In Your 30s By your 30th birthday, experts recommend that your retirement savings equal your approximate annual income.2 They also recommend you have 2 times your income saved by age 35. But one’s ability to save for retirement (or invest outside their retirement accounts) largely depends on the job market they graduated into. Many members of Generation X and Millennials may not have found a career-focused position until their 30s, giving them a later start on saving than others. When investing in your 30s, it’s important to remember that perfect is the enemy of good. Even if you can’t afford to max your retirement accounts yet, saving a little at an early age can reap major rewards in the future. And with 30 years or more until retirement, you can afford to take a little more risk (which might also yield higher returns) than someone who hopes to retire within the decade. In Your 40s In your 40s, experts recommend you have three times your income saved in retirement accounts like a 401(k), IRA, or Roth IRA. For many, the beginning of their fifth decade can mark greater career stability and earning potential than ever before, making this an ideal time to save. On the other hand, one’s 40s can also

When the markets are shaky, it can be tempting to rely on political headlines or pending legislation to time your entry or exit points. However, letting politics drive your investment decisions can be a costly mistake. Learn more about what helps market trends endure beyond political administrations and why you should ignore the noise and focus on your investment fundamentals. Politics’ Long-Term Impact (or Lack Thereof) on Markets How much do political decisions really impact the stock market in the long term? Not much, as it turns out. Although politically-charged situations like Brexit or the Tax Cuts and Jobs Acts did create momentary market moves, over the long term, the stock market has tended to trend upward regardless of the action (or inaction) taken by any particular administration or President.1 Political news can certainly contribute to short-term market swings, but—absent some independently-corroborated change to a stock or index’s fundamentals—the market’s initial reaction to political news is usually short-lived. As a result, it’s important to tune out the “noise” of daily political news and instead focus on your long-term goals and investment horizons. Simply doing an internet search for “stock market crash in [year]” will yield dozens of projections and predictions of another Great Depression that never came to fruition. Listening to these types of political doomsayers can lead you to avoid a healthy amount of risk in your investment portfolio. Stay the Course with Appropriate Asset Allocation Volatility can be part of investing no matter who is in office. But if the amount of volatility in your portfolio makes you uncomfortable or triggers thoughts of cashing out after a string of poorly-performing days, it may be time to revisit your asset