Market Review
Despite the last week of negative returns in worldwide equity markets, YTD returns across all asset classes continue to be positive across the board (see chart below). Emerging markets are leading the charge with a 33.59% YTD return, almost doubling the YTD return of the S&P 500 index of 17.52%.
The U.S. aggregate bond market is looking like it will have exceed a 7% return for 2025 with a combination of yield from interest and capital appreciation from falling rates leading to a fantastic year for bonds.
As the government shutdown drags on, consumer sentiment about the economy is falling towards record low levels, according to the University of Michigan survey that tracks the data. If the shutdown is not resolved soon, it could put further pressure on equity markets.
Tariffs
October was another month with tariff negotiations, but the market largely shrugged off reacting to them.
• President Trump said the U.S. will impose an additional 10% tariff on Canada in addition to the current 35% because of a Canadian ad campaign that included comments on tariffs by former President Ronald Regan that President Trump claimed were misrepresented. Time will tell if this actually happens.
• The U.S. and China reached a trade agreement on Halloween that will result in the U.S. lowering tariffs on Chinese imports imposed this year to 20% to bring the total on Chinese imports to ~47%. This was a large reversal from threats made earlier in the month that China would be hit with an additional 100% tariff starting on November 1st.
The U.S. Supreme court started oral arguments the week of November 3rd to determine if President Trump can rely on the International Emergency Economic Powers Act (1977) to impose tariffs without authorization from Congress. Skepticism voiced by the conservative members of the court that the broad application of tariffs since Liberation day to defend threats to the defense and industrial base in the U.S. suggest that elements of the tariffs may be in jeopardy. A decision from the court is expected in June or July.
Interest Rates
As expected, the Federal Reserve cut interest rates by another 0.25% in October after taking the same course in September. But Jerome Powell inserted some uncertainty into what direction the Federal Reserve will take when it meets again in December when he said that an additional cut was not a forgone conclusion.
Speaking after the meeting, Chairman Powell said the decision to cut rates was based on the downside risks to employment, which have increased in recent months. Headlines of late have noted massive layoffs at Amazon, Target, UPS, Klarna, Sales Force and Trip Advisor.
After the meeting, market expectations for a December rate cut dropped by nearly 30% from 92% to 63%. The Fed has the difficult task of balancing unemployment and inflation, and the government shutdown (now in its fifth week) is adding to the complexity of managing both.
Mortgage rates fell briefly to 6.26% in September, which was the lowest point of 2025 and led to an 80% jump in refinancing, according to data from the Mortgage Bankers association. Homeowners with high interest rates on their mortgages are itching to lower their monthly payments and will remain eager to take advantage of short windows of opportunity to refinance.
Buyer Beware
On October 28th, NASCAR driver Kyle Busch and his wife made headlines when they posted a video on Facebook discussing how they believed they were scammed by a life insurance agent and Pacific Life Insurance Company into buying a massive life insurance policy represented to them as a retirement planning vehicle.
Indexed Universal Life, also known as IUL, has been all over social media the past couple of years, marketed as a tax advantaged way to save for retirement without the risk of loss of principal. Unfortunately, most of the people hyping the insurance have no idea how it works (it is extremely complicated) and are lured by the high commissions that come with selling it. The agent that sold the Busch family their policy allegedly got a 35% commission on $10.4 million in premiums paid.
Illustrations, like the ones that were allegedly shown to the Busch family, often show outcomes with best case scenarios that have little chance of actually happening. For example, Kyle Busch alleges that the insurance agent told him that if he paid $1 million / year in premiums for five years that he would be able to receive $800,000 / year in tax free retirement income once he turned 52 (he’s 40 now). The math behind that equation is practically impossible.
The Busch family is suing Pacific Life and the agent for $8.5 million. Hopefully this case publicizes the danger of buying complicated insurance policies like IUL.
Closing Thoughts
On November 6th, Tesla shareholders approved a pay package for Elon Musk that could ultimately give him new Tesla shares worth $1 trillion. To get to the full payout, Tesla would have to climb to a market capitalization of $8.5 trillion, likely making it the largest company in the world by value. He would also have to get Tesla’s earnings to $400 billion / year which is ~25x Tesla’s 2024 earnings of $16 billion. Sort of a “rising tide lifts all ships” arrangement.
These are lofty targets. The pay package was approved by shareholders with more than 75% of the votes cast in favor. Selling electric vehicles won’t be the path Musk takes to $1 trillion. Possibly his vision of an army of humanoid robots and xAI will lead Musk to be the world’s first trillionaire.
The following table summarizes the performance of major asset classes through 10/31/2025:
Note: Return data obtained from Dimensional Fund Advisors database. Returns include dividends and reinvestments.
Regards,
The Milestone Team
Reminders
Please contact us if your financial goals or circumstances have changed or if we can address your needs. Also, please let us know as soon as possible about any change to your contact information.
SEC regulations require us to remind you to compare our reports with the statements provided by the independent custodian that holds your accounts (Fidelity). Please let us know if there are any discrepancies, or if you are not receiving separate statements (or notification of their online availability) directly from the custodian. Please remember that past performance does not predict future results.
Disclaimer: This is not to be considered investment, tax, or financial advice. Please review your personal situation with your tax and/or financial advisor. Milestone Financial Planning, LLC (Milestone) is a fee-only financial planning firm and registered investment advisor in Bedford, NH. Milestone works with clients on a long-term, ongoing basis. Our fees are based on the assets that we manage and may include an annual financial planning subscription fee. Clients receive financial planning, tax planning, retirement planning, and investment management services and have unlimited access to our advisors. We receive no commissions or referral fees. We put our client’s interests first. If you need assistance with your investments or financial planning, please reach out to one of our fee-only advisors. Advisory services are only offered to clients or prospective clients where Milestone and its representatives are properly licensed or exempt from licensure. Past performance shown is not indicative of future results, which could differ substantially.
Market Review
Despite the last week of negative returns in worldwide equity markets, YTD returns across all asset classes continue to be positive across the board (see chart below). Emerging markets are leading the charge with a 33.59% YTD return, almost doubling the YTD return of the S&P 500 index of 17.52%.
The U.S. aggregate bond market is looking like it will have exceed a 7% return for 2025 with a combination of yield from interest and capital appreciation from falling rates leading to a fantastic year for bonds.
As the government shutdown drags on, consumer sentiment about the economy is falling towards record low levels, according to the University of Michigan survey that tracks the data. If the shutdown is not resolved soon, it could put further pressure on equity markets.
Tariffs
October was another month with tariff negotiations, but the market largely shrugged off reacting to them.
• President Trump said the U.S. will impose an additional 10% tariff on Canada in addition to the current 35% because of a Canadian ad campaign that included comments on tariffs by former President Ronald Regan that President Trump claimed were misrepresented. Time will tell if this actually happens.
• The U.S. and China reached a trade agreement on Halloween that will result in the U.S. lowering tariffs on Chinese imports imposed this year to 20% to bring the total on Chinese imports to ~47%. This was a large reversal from threats made earlier in the month that China would be hit with an additional 100% tariff starting on November 1st.
The U.S. Supreme court started oral arguments the week of November 3rd to determine if President Trump can rely on the International Emergency Economic Powers Act (1977) to impose tariffs without authorization from Congress. Skepticism voiced by the conservative members of the court that the broad application of tariffs since Liberation day to defend threats to the defense and industrial base in the U.S. suggest that elements of the tariffs may be in jeopardy. A decision from the court is expected in June or July.
Interest Rates
As expected, the Federal Reserve cut interest rates by another 0.25% in October after taking the same course in September. But Jerome Powell inserted some uncertainty into what direction the Federal Reserve will take when it meets again in December when he said that an additional cut was not a forgone conclusion.
Speaking after the meeting, Chairman Powell said the decision to cut rates was based on the downside risks to employment, which have increased in recent months. Headlines of late have noted massive layoffs at Amazon, Target, UPS, Klarna, Sales Force and Trip Advisor.
After the meeting, market expectations for a December rate cut dropped by nearly 30% from 92% to 63%. The Fed has the difficult task of balancing unemployment and inflation, and the government shutdown (now in its fifth week) is adding to the complexity of managing both.
Mortgage rates fell briefly to 6.26% in September, which was the lowest point of 2025 and led to an 80% jump in refinancing, according to data from the Mortgage Bankers association. Homeowners with high interest rates on their mortgages are itching to lower their monthly payments and will remain eager to take advantage of short windows of opportunity to refinance.
Buyer Beware
On October 28th, NASCAR driver Kyle Busch and his wife made headlines when they posted a video on Facebook discussing how they believed they were scammed by a life insurance agent and Pacific Life Insurance Company into buying a massive life insurance policy represented to them as a retirement planning vehicle.
Indexed Universal Life, also known as IUL, has been all over social media the past couple of years, marketed as a tax advantaged way to save for retirement without the risk of loss of principal. Unfortunately, most of the people hyping the insurance have no idea how it works (it is extremely complicated) and are lured by the high commissions that come with selling it. The agent that sold the Busch family their policy allegedly got a 35% commission on $10.4 million in premiums paid.
Illustrations, like the ones that were allegedly shown to the Busch family, often show outcomes with best case scenarios that have little chance of actually happening. For example, Kyle Busch alleges that the insurance agent told him that if he paid $1 million / year in premiums for five years that he would be able to receive $800,000 / year in tax free retirement income once he turned 52 (he’s 40 now). The math behind that equation is practically impossible.
The Busch family is suing Pacific Life and the agent for $8.5 million. Hopefully this case publicizes the danger of buying complicated insurance policies like IUL.
Closing Thoughts
On November 6th, Tesla shareholders approved a pay package for Elon Musk that could ultimately give him new Tesla shares worth $1 trillion. To get to the full payout, Tesla would have to climb to a market capitalization of $8.5 trillion, likely making it the largest company in the world by value. He would also have to get Tesla’s earnings to $400 billion / year which is ~25x Tesla’s 2024 earnings of $16 billion. Sort of a “rising tide lifts all ships” arrangement.
These are lofty targets. The pay package was approved by shareholders with more than 75% of the votes cast in favor. Selling electric vehicles won’t be the path Musk takes to $1 trillion. Possibly his vision of an army of humanoid robots and xAI will lead Musk to be the world’s first trillionaire.
The following table summarizes the performance of major asset classes through 10/31/2025:
Note: Return data obtained from Dimensional Fund Advisors database. Returns include dividends and reinvestments.
Regards,
The Milestone Team
Reminders
Please contact us if your financial goals or circumstances have changed or if we can address your needs. Also, please let us know as soon as possible about any change to your contact information.
SEC regulations require us to remind you to compare our reports with the statements provided by the independent custodian that holds your accounts (Fidelity). Please let us know if there are any discrepancies, or if you are not receiving separate statements (or notification of their online availability) directly from the custodian. Please remember that past performance does not predict future results.
Disclaimer: This is not to be considered investment, tax, or financial advice. Please review your personal situation with your tax and/or financial advisor. Milestone Financial Planning, LLC (Milestone) is a fee-only financial planning firm and registered investment advisor in Bedford, NH. Milestone works with clients on a long-term, ongoing basis. Our fees are based on the assets that we manage and may include an annual financial planning subscription fee. Clients receive financial planning, tax planning, retirement planning, and investment management services and have unlimited access to our advisors. We receive no commissions or referral fees. We put our client’s interests first. If you need assistance with your investments or financial planning, please reach out to one of our fee-only advisors. Advisory services are only offered to clients or prospective clients where Milestone and its representatives are properly licensed or exempt from licensure. Past performance shown is not indicative of future results, which could differ substantially.
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