We all know markets have been on a run, but just how fast they’re moving might shock you.

US equity markets have hit all-time highs one out of every three days on average in the third quarter, according to a Vanguard analysis. In fact, Q3 accounted for the majority of record high days so far this year. Those stats can make it easier for advisors to navigate the markets, without having to chase returns, while keeping clients diversified.

“In other large bull markets, we saw investors piling into equities, and that creates asset allocations above their tolerance,” said Fran Kinniry, head of Vanguard’s investment advisory research center. “Over the past decade, there’s been record flows into bonds and money markets, while equities are almost flat.”

Timing Ain’t Anything

If you just read the headlines on the economy or looked at the political environment over the past nine months, without context, you probably would’ve thought the markets were set up for a terrible year and quarter, but it’s quite the opposite, Kinniry told Advisor Upside. “A lot of people try to make the market into simple patterns, like, ‘If this happens, then that happens,’” he said. “The key is to set asset allocations based on goals, objectives, time horizons, and really try to tune out all the noise.”

The Vanguard analysis found:

• Equities reached record highs on 28 days this year through Q3 — or 15% of trading days — far exceeding the long-term average of about 15 days, or 8%.
• A balanced investor with a 60/40 split would be up 5% for the quarter and 13% year-to-date.

Can You Take Me Higher? Many economists say markets are overvalued. The Buffett Indicator, which compares the total value of the stock market to US GDP, is currently at a record high of nearly 220%. That kind of level is often an indicator that the economy is in a bubble. Some strategists believe high valuations may persist, and Kinniry agrees there’s some truth to that.

“The companies that make up the US economy today look totally different than 50 years ago,” he said, noting that today’s leading stocks are asset-light, cash-generating businesses with high P/E multiples, unlike the industrial-heavy market leaders of the past. However, he cautioned against calling high valuations the new norm. “The market is always different all the time,” he said. “Comparing today’s P/E to one from 50 years ago doesn’t make much sense.”

For some, retirement is starting to feel like the elusive green light in “The Great Gatsby”: much-desired, an essential element of the American Dream … and forever out of reach.

Retirement math might not add up anymore, according to recent research from Goldman Sachs. Roughly four in 10 US workers spanning Gen Z, Millennials and Gen X are living paycheck to paycheck, and nearly three-quarters struggle to save for retirement. If that trend continues, more than half could be living paycheck-to-paycheck by 2033. Experts said the trend is caused by the rising costs of living and longer life expectancies, and that advisors should know how to adjust their advice accordingly.

“Telling workers to save more ignores the realities most workers face,” Greg Wilson, global head of retirement within Goldman’s asset and wealth management arm, said during a webinar. “The mounting challenges American workers face [amid] rising costs and competing financial priorities… make it harder than ever to save for retirement.”

Polar (Financial) Vortex

The cost of everything from housing to childcare has risen substantially over the past two decades, leaving little room for retirement contributions, a trend Goldman Sachs called a growing “financial vortex.” From 2000 to 2025, the cost of homeownership as a share of income jumped from 33% to 51%; for private college, from 65% to 85%; and for healthcare, from 10% to 16%. “There is less room in people’s wallets today than there was 20 years ago,” said Chris Ceder, senior retirement strategist at Goldman. “This structural shift is really underpinning many of the challenges we see for retirees today.”

Still, Americans haven’t lost faith in their retirement prospects — at least not yet. The survey found that 68% of workers feel “somewhat confident” about hitting their retirement goals, and more than half increased their savings over the past year. But under the surface, confidence is fragile: 58% fear they’ll outlive their savings, and nearly half find managing those savings stressful. That confidence gap is a hallmark of the new retirement landscape, Ceder said. “Markets are fairly up, account balances are up, but when you think through those longer-term risks, they’re still very present in the minds of retirement savers,” he added.

All of this makes retirement planning an increasingly essential service that can make a big difference in pre-retirees’ prospects. According to the Goldman report:

• Those with access to an employer-sponsored retirement plan boast a 29% higher savings-to-income ratio.
• Retirees who followed a personalized plan held 27% more retirement savings than those who didn’t.

Lifelong Assets. People are also living longer after they retire. According to the World Health Organization, the global life expectancy increased by nearly seven years between 2000 and 2019, from 66.8 years to 73.4. Nancy DeRusso, head of financial planning at Goldman Sachs Ayco, said one solution is to figure out what pre-retirees value most so that their plans can be tailored to them.

“You can say, ‘Oh if you downsize your house, then maybe you can retire early. Or, ‘Are you really willing to do that to fund your children’s college education?’” she said. “You need to get to that emotion. If you don’t have that emotion, people can’t act.”

Clients have sacrificed and saved after-tax income for retirement. The IRS and most states want to thank them for all the taxes they’ve paid. Now they’re ready for retirement, a time when their money needs to work for them, and you should make the tax code work for them as well. Too often, we see investors waste a significant portion of their income by failing to pay attention to the tax implications of the ETFs they hold.

ETFs with high distributions, or dividends, may appear like bright, shiny objects, but not all that glitters is gold. From a tax standpoint, many high-distribution ETFs provide only fool’s gold. There is an old saying that neither death nor taxes can be avoided. If you are prudent, however, the latter can be minimized. Not all ETF distributions are taxed the same way. In a taxable account, look for ETFs that optimize after-tax income by having a significant portion of their distributions treated as a tax-free return of basis, also referred to as a return of capital. Allow us to explain.

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