Brokers and/or Brokerage firms may be reviewed utilizing FINRA’s BrokerCheck

Episode 24 - Third Quarter Review

In this episode of Blue Money, Kevin & Jim are helping you prepare for the last quarter of 2023. They start off giving a thorough review of the market during the third quarter of 2023. Listen to find out which month is historically the year's lowest performing month every year in the 1950s.

Kevin helps us sift through the negative news cycle while Jim gives us the current numbers. Kevin does a great job breaking down how the economy works and how to approach analyzing the state of the market. Kevin’s analysis of the third quarter shows a positive outlook for the fourth quarter of 2023. He takes things a step further by looking at historical data to give a detailed and informed evaluation.

To contact Lt. Jim Donnelly:

To contact Kevin McGarry:

To schedule a free financial assessment, fill out the form below.


Episode 24 – Third Quarter Review


This is Blue Money, a finance podcast made for cops by cops. With us, you know your money’s safe. Lieutenant Jim Donnelly of the Bensalem Police Department and co-host Kevin McGarry of Valley Financial Group, come together to help protect and serve your financial needs. This is Blue Money.

Jim: I want to welcome everyone back to the Blue Money Podcast. This is your host, Jim Donnelly.

Kevin: Jimmy.

Jim: I’m here with my co-host, Kevin McGarry.

Kevin: What’s up brother?

Jim: I’m much Kevin. Man’s getting ready for Phil tonight. Seriousness, Taiwan won.

Kevin: Need to win this, need to win this, need to win.

Jim: Need to win. How the market, usually when the Phillies were the World Series, Kevin.

Kevin: I can tell you what, last year we were Bear Market down over 20%. 2008 they won the series, but we were in a deep recession.

Jim: Yeah, man.

Kevin: I don’t remember 80.

Jim: Because you can’t have everything.

Kevin: You can’t have everything. But let me ask you, would you go on recession or rather win the World Series?

Jim: Being a financial advisor? Man, that World Series is second to me. I’ll tell that. Would you want them phones blowing up nonstop, you know.

Kevin: I hear you.

Jim: It’s nice to have a parade now. We’ll see man. Hopefully they can go through tonight.

Kevin: I mean typically though in the Phillies in the World Series, it helps our economy around here.

Jim: Yeah, absolutely.

Kevin: People spend money.

Jim: So. Alright, Kev, for this podcast, I thought we’d hit upon third quarter review market outlook for the rest of the quarter going into the third quarter, the investors were increasingly confident that a recession wasn’t coming. Most reasons for that was because of the healthy job market and consumer spending. However, when I look at the third quarter was down a little over 3%. The SP 500 was down a little over 3%, third quarter. However, historically going forward, the fourth quarter is usually positive. I mean, usually historically it’s about 4.2% in the SP 500. So tell me your outlook. What do you think, Kev?

Kevin: I mean seasonality here, September historically it’s been a tough month and that’s going back since 1950s. It’s been the worst performing month in the calendar. And this year’s no different. The index was down close to 5% for the month. And so that’s not abnormal. We’ve been through it the last three years. September was down, right? And now you throw on top the market’s down, right? And you throw in all this bad news. The unfortunate thing that in Israel you still have high interest rates. You have stagnant inflation sticking around. You got government shutdowns. We don’t even speak of the house right now. You have yield soaring. So there’s a lot of negative news out there to just drive fears, right? And get people off their goals. They’ll be like, oh man, I can get a four or 5% short-term treasury. And they want to jump out of their portfolios with all this negative noise and negative performance.

Jim: Like you said, you do hear that they want to jump in something that’s guaranteed low risk and might be a 5%, 5.5. But let’s look at the year already. The date that’s be 500, going to closing the third quarter on September 29th, it was up 11.7%. And historically for the fourth quarter, we just talked about 4.2%. So you add that all together. I mean that’s 15.9% I is what we’re kind of looking for this year where they’re guaranteed five. Well, guess what? That’s not a good deal with that. If the SP5 returned a little over 15%, if that were on pace for that.

Kevin: I mean, like, listen, I mean, having higher treasury rates isn’t a bad thing for some of parts of the portfolio.

Jim: Yeah. Absolutely.

Kevin: But everyone’s portfolio is structured differently based on diverse talent and long-term needs. I think right now there’s a ton of negative news and when you throw a negative performance on there and a pullback in the market, it gets people really scared and jittery. But we have to really diagnose, hey, how do we get through it? Right? And secondly, where’s the positive news? And let’s start with positive news. You know, right now the consumer is still spending, this economy is based on consumption. And if we look at it, right, you know, if we look at the consumption, it’s made up of three parts, right? So the three parts are, what we’re looking at here are the economy relies on employment growth, hourly wage growth, and the numbers of hours worked right? And all those numbers are up. Income growth is up, you know, has ran around 5.2% annual pace over the last past three months, which has higher than inflation. Also the economy Jimmy is created over 336,000 jobs this month, blowing past expectations of 187,000, right? Payroll growth for the last three months for this quarter has been on average 226,000 jobs versus last quarter, 210,000. You know, and then throw on top of that unemployment was steady at 3.8, which is still well below historical levels, the consumers work and the consumer spending right now, right? These are all positive things for the economy.

Jim: Right? I think looking back at the third quarter, a couple sectors that did pretty good energy by far was the best performing sector. It was only sector that actually increased month to month. Right behind that was communication services. That finished second, that was up a little over 2% last quarter. I mean, obviously real estate and utilities took a beating.

Kevin: Yeah.

Jim: I mean utilities that going into the year they were overvalued. Now they’re probably undervalued at this point.

Kevin: Right?

Jim: So what do you think of that, Kev? What do you think? Like what we should be looking for?

Kevin: Well, I think we should be looking at history too, right? Have we been through scenarios? Where’s there good news, right? We know where the bad news we can turn on TV. We just talked about some good news. Economy’s still moving forward, has some momentum, but September being down isn’t something new as we just mentioned. But if we look at September’s where September was down greater than 3% and year to date, you were still positive, right? So you’re down more than three or more, but yet the index is still positive. That has happened seven times, right? If you look at how did the market respond in October during those timeframes, right? On average, you were up six out of seven times three on average, 3.5%. If you look at the fourth quarter in those scenarios, seven out of seven times you were positive and the average return was 9% for the quarter. So in this scenario, historically we’ve gotten through situations that we just been through. Now it may not happen, but historically we have.

Jim: Another historical thing, Kevin, what you hit upon for the audience is we got a 2024, it’s going to be an election year.

Kevin: Yep.

Jim: So what usually historically should we be looking for with a return or what do we usually say?

Kevin: I mean, you think about it, man, these guys, they want to get elected, right?

Jim: Yep.

Kevin: So when you get, especially first term presidents, when you want to get elected, you want to…

Jim: Have strong economy.

Kevin: That’s it. There you go. And the numbers don’t lie. I mean, so in the fourth quarter, since 1950 first term president in their fourth year, the index usually averages close to 12%. So they’re trying to get elected, they want the economy continue to grow. It’s positive for reelection. And there’s other reasons there too. But if you look at a second term president, right? In their fourth year…

Jim: Needed or done.

Kevin: It’s less than half a percent return for the year. So I think that the big thing is like, how do we help our clients navigate this, Jim, right?

Jim: Yeah. So I mean, I think that’s the question we get a lot and I tell the cops I’m working with or other police officers that call on emails, I said, listen, if you have 10, 15, 20 years ago, don’t even listen to this noise. Just keep doing it. Keep putting the money in your 457s, your 401s, just keep maximum out. Don’t even get caught up in the noise. Don’t get caught up in the news. Now if you’re about to retire in a couple years and you’re in drop and you’re getting nervous and you’re scared about the market, who to trust or who to talk to. To me, don’t make any uneducated decisions on something that you’re really not an expert in. Reach out to someone, talk to financial advisor. There’s plenty of them out there. Get some advice. Let them know your hopes, your goals, your dreams, your vision, where you want to go in retirement. Let them look at your portfolio and, and try to work out a plan that you can walk down together.

Kevin: A hundred percent. I mean, I just got an email from a client and he is like, what do you think about treasuries? Should we be moving all our money in treasuries? And what I wanted to do was called the financial cops on this guy. He’s a good dude, call the cops in this guy Jimmy and I think at the end of the day, when you’re calling to do this, when you’re calling to blow up your portfolio, they have a financial plan, something’s going wrong. Either we’re not getting our message through and we’re not repeating it consistently enough. Or we need to sit down and talk. Because at the end of the day, if you look at it, assuming you have a 50 year investment horizon, you can expect to live through about 14 bear markets, right? 14 of them. And on top of that, bear markets can be painful as you know, right? We, we lived through one last year. Over the last 94 years bear markets or recessions have comprised of only about 21.4% of the time. The other 78% of the time the market was up. So we got to maintain the strength of the portfolios and over communicating, meeting their plans, their plan meets their goal, right? And you make sure you’re diversified. So yeah, diversification sometimes reduces some of that return, right? But it also reduces some of that volatility.

Jim: It’s a safety net. Yeah, absolutely. It helps them. So my message would just, guys, stay in the game. Talk to someone if you’re going to make any rash decision, if you’re out nowhere are, you’re going to wake up tomorrow and just move all your own money. You know, money market that’s in your 4 57 and you have no, you know, never thought about how you’re going to get your money back in. How you going to get back into the game, yet you just don’t know. You just feel like it’s going to collapse because Everyone’s telling it’s going to collapse or signs out there and you’re hitting the panic button because you just want to get something guaranteed three 4% and sleep better at night. That’s just not the strategy that’s going to really grow your retirement fund.

Kevin: A hundred percent

Jim: To talk someone. So Kev what do you want people to take away from this podcast? Give us three things, Kev?

Kevin: To make money Jimmy.

Jim: That’s right. To make money.

Kevin: I love that applause. [Crosstalk 00:10:01] There, man. Hopefully they’re doing that tonight with the Phillies game. No, but I think at the end of the day, it’s really simple. Have a plan, work with a professional, right? Make sure that portfolio is diversified and meets your long-term goals, your risk to, and your income needs.

Jim: There you go man. Give it.

Kevin: That’s it. That’s it.

Jim: You wheel on a deal right now. Like Wheeler was other night.

Kevin: That’s it. Then he gave up a dinger.

Jim: Yeah. Alright, guys going to wrap up the Blue Money podcast for today. Thank you for listening. If you have any questions about your portfolio or this podcast specifically, don’t hesitate to reach out to Kevin and I just for a phone call, text message, email, anything you want. So guys, thank you for listening. Be safe.

Kevin: Be safe out there.

Thanks for listening to Blue Money. To learn more about Jim and Kevin or for a free financial assessment, visit or click on the link in the podcast description or show notes. Until next time, safe investing.

This material is intended to be educational in nature and not as a recommendation for any particular strategy, approach, product or concept for any particular advisor or client. These materials are not intended for any form of substitute or individualized investment advice. This discussion is general in nature and therefore non-intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own. Before participating in any investment program or making any investment clients, as well as all other readers are encouraged to consult with their own professional advisors, including investment advisors and tax advisors. Valley Financial can assist in determining a suitable investment approach for a given individual, which may or may not closely resemble the strategies outlined here in.

Scroll to Top