Steady. But Ready.
“We suffer more often in imagination than in reality.” – Seneca
September has historically been a market weak spot, yet it has defied expectations. Instead of stumbling, stocks are pushing to new highs, volatility remains muted, and the seasonal trapdoor that investors often brace for has yet to appear.
That ongoing divergence from history highlights why we rely on process over prediction. Markets will often tempt investors with patterns, narratives, and gut instincts, but those don’t provide a consistent edge. A systematic investing approach does, in our view. It adapts to what’s actually happening — capturing strength while it lasts and cutting risk when conditions change — and it removes the guesswork that so often derails long-term plans.
In this month’s Note, we look at how markets navigated September’s supposed weakness, the potential catalysts that could bend trends from here, and why consistency is as important in strong markets as it is during downturns.
But first, here’s a summary of what transpired in the markets in September.
Disclaimer: This note is for general update purposes related to the general strategy and approach of Spartan Planning portfolios. Every client’s situation including Risk Profile, Time Horizon, Contributions, and Distributions is different from other clients. Your exposure to any given asset class will depend on your goals, risk profile, and how tactical or static your risk profile calls for. Adjustments can vary across strategies depending on each strategy’s objectives. What’s illustrated above most clearly reflects allocation adjustments for the Growth Strategy. If there have been changes to your risk profile and/or goals or if you wish to discuss them in more depth, please contact your advisor.
Asset-Level Overview
Equities & Real Estate
Despite September being the market’s weakest month on average — and the only one with a negative long-term return — the S&P 500 has so far delivered solid gains and reached new all-time highs. Price volatility continued to be low, which we have found to be highly correlated with favorable environments for positive performance in stocks. While things can change quickly, trends remain very positive and as a result our strategies will remain fully invested.
International stocks also enjoyed positive performance in September, approximately in line with the U.S. Emerging markets are running ahead of Foreign Developed, and both segments continue to experience uptrends. There will be no change to our fully invested status.
In a landscape of surging equities, real estate remains the weakest and within a sideways range. While the Fed’s benchmark rate just experienced its first decrease of 2025, mortgage rates remain mostly unchanged. With inflation and tariffs still providing some uncertainty, strongly positive trends have yet to materialize. The outcome of such trendless conditions will be a continued allocation at the minimum in this asset class, as our portfolios previously handed real estate exposure up to much-stronger U.S. equities.
Fixed Income & Alternatives
Bond instruments with intermediate to long duration generally moved higher over the last 30 days but remain relatively weak as the path of interest rates continues to be foggy. Perhaps more importantly, the risk/return tradeoff for these instruments is currently inferior to their short-term counterparts. The result is that exposure in our portfolios will not change, with intermediate bonds being underweight and long duration exposure being near zero.
Within the multi-asset trend alternatives bucket, short-term fixed income futures and other related instruments remain the most significant in terms of allocation. Exposure to longer-duration bonds remains primarily in short positions. Commodities, such as gold and cocoa, also make up noteworthy positions. Meanwhile, the continued strength in stocks globally has caused net long exposure to increase as well. The U.S. Dollar’s steady decline has caused this segment to increase allocations to foreign-denominated currencies.
Sourcing for this section: MarketWatch, “September is historically the worst month of the year for stocks. Why this time could be different.,” 9/1/2025; RBC Wealth Management, “Nothing new about September slides for stock markets,” 8/25/2025; and CNN, “Dow crosses 46,000: Stocks hit record highs as Wall Street embraces Fed rate cut hopes,” 9/11/2025
3 Potential Catalysts for Trend Changes
Slowing Business Growth: A monthly indicator of activity in the manufacturing and services sectors decreased to 53.6 in September, down from 54.6 in August. This reading of the S&P Global Flash U.S. Composite PMI indicates overall business activity continued to expand, but the pace was the slowest in three months. “Although tariffs were again cited as a driver of higher input costs across both manufacturing and services, the number of companies able to hike selling prices to pass these costs on to customers has fallen, hinting at squeezed margins but boding well for inflation to moderate,” said Chris Williamson, an Economist at S&P Global.
Jobs, Jobs, Jobs: The Labor Department reported that the size of the unemployed population hit a new recent high earlier in August. Continuing claims, which is an indicator of the size of the total unemployed population, came in at 1.97 million in early August. That is a new high since November 2021, evidence that slow hiring is frustrating job searchers. Additionally, a difficult jobs report from the Bureau of Labor Statistics included downward revisions showing the labor market was far less healthy this spring than previous reports indicated. Although hiring has stalled, recent initial-claims data suggest companies are not laying people off in volume, rather they are simply not bringing on new employees. One in five U.S. employers surveyed by the Conference Board said they plan to slow hiring in the second half of 2025; that is about double the rate of companies that anticipated bringing on fewer people at this time last year. It is currently taking the average worker 24 weeks to find a job after losing one, which is about a month longer than a year ago.
Housing Brightening: Sales of existing homes rose unexpectedly in July. The news increased hopes that the moribund housing market may be improving and that activity can gain more momentum this fall. Home sales were up 2% from the prior month to a seasonally adjusted annual rate of 4.01 million. The housing market is stuck in a third-straight year of depressed sales. However, some analysts say the fall season could see sales. Inventory of unsold homes – both new and existing – has also reached the highest level since November 2019, which is a positive sign for home buyers and a reason why the rate of annual price growth is slowing. More than 20% of listings had some kind of price cut in July, and average home sales prices are now falling in some parts of the U.S., especially in the Sunbelt. The median existing-home price in July was $422,400, a little lower than the record price in June, but still up 0.2% from a year earlier.
Sourcing for this section: The Wall Street Journal, “U.S. Business Activity Growth Slows for Manufacturing, Services,” 9/23/2025; The Wall Street Journal, “Home Sales Fell in August, Slowed by High Home Prices,” 9/25/2025; The Wall Street Journal, “What Decides Where Mortgage Rates Go From Here,” 9/18/2025; and The Wall Street Journal, “Inflation Erased U.S. Income Gains Last Year,” 9/9/2025
What the Data Suggests For Q4
“In preparing for battle I have always found that plans are useless, but planning is indispensable.” – Dwight D. Eisenhower
Now that we have surpassed the seasonally poor performance of September, it is reasonable to start thinking about Q4 and where things go from here.
This year has been a mixed bag for sure:
- High volatility in February
- Between mid-February and early-April, the S&P 500 reached roughly a 20%+ decline (the mainstream definition of a bear market)
- Low volatility driving markets to new all-time highs and double-digit returns through Q3
According to an LPL Financial study, since 1950 when the S&P 500 has been up around 10% through September, Q4 has finished positive around 87% of the time, with an average gain of about 5%.
This level of performance surpasses the typical tendency of U.S. markets to increase.
With these findings in hand, we think investors should feel confident in the prevailing trends. Often, the right bet for those suitable for growth is to remain invested, in our opinion. Deviating from this approach in favor of a discretionary flight to safety would be a poor decision regardless of whether the outcome turned out to be correct…which brings us back to the benefits of a systematic investing approach.
Steady But Ready
We’ve always believed in the benefits of following systematic trends, and we don’t shy away from sharing why it can help you reach your goals. Our friends like to joke that we never miss an opportunity to do so, and they’re not wrong! It can be difficult to find mainstream commentary about any approach outside of passive investing. You might be able to find some interesting information about the benefits of a value approach, or perhaps the usefulness of incorporating alternatives or other fringe assets.
Amidst this lack of information, we feel it’s our responsibility to explain how systematic trend following can help you as an investor. It is our goal to provide resources that help you make informed decisions. Even in a year like 2025, when our strategies slightly trail their passive counterparts so far, we think a systematic investing approach has still added value for investors. For example, when markets were rapidly declining in March and April, our strategies had already reduced exposure. Had markets continued to decline, investors would have been protected. Just because the result ended up not being devastating doesn’t mean the decision to move defensive was poor, especially since our investing process allows us to quickly regain exposure when conditions reverse — which is what we did.
An analogy would be preparing for and reacting to an earthquake. Any one can be “the big one,” but just because the last one wasn’t doesn’t make it a bad decision to get under your desk.
Now, as 2025 heads into Q4, our strategies sit with a slightly lower absolute return, but lower volatility, lower drawdowns, and better risk-adjusted return. This is the crux of the value proposition we offer to investors.
In closing, while 2025 currently looks great and the data suggests odds are good it will continue, 2026 is just around the corner. And the picture is constantly evolving.
We often talk about how effective markets are at discounting future scenarios. Just as one thing is quickly priced in, the next item is being parsed by investors. For example, it is possible ALL potential upcoming rate cuts have been priced in and markets are on the verge of pricing in whatever comes next. In our view, our strategies have proven they are ready – have yours?
Sourcing for this section: Barchart.com, S&P 500 Index ($SPX), 2/19/2025 to 4/7/2025 and LPL Financial, “What Can Year-to-Date Gains Tell Us About the Fourth Quarter?,” 9/24/2025
Disclaimer: this note is for general update purposes related to the strategy and approach of Spartan Planning portfolios. Every client’s situation including Risk Profile, Time Horizon, Contributions, and Distributions is different from other clients. Your particular exposure to any given asset class will depend on your goals, risk profile, and how tactical or passive your risk profile calls for. If there have been changes to your risk profile and/or goals or if you wish to discuss them in more depth please contact your advisor. This email and the data herein is not a solicitation to invest in any investment product nor is it intended to provide investment advice. It is intended for information purposes only and should be used by investment professionals and investors who are knowledgeable of the risks involved. No representation is made that any investment will or is likely to achieve results comparable to those shown or will make any profit at all or will be able to avoid incurring substantial losses. While every effort has been made to provide data from sources considered to be reliable, no guarantee of accuracy is given. Historical data are presented for informational purposes only. Investment programs described herein contain significant risks. A secondary market may not exist or develop for some investments portrayed. Past performance is not indicative of future performance. Investment decisions should be made based on the investors specific financial needs and objectives, goals, time horizon, tax liability, risk tolerance and other relevant factors. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Investors should consider the underlying funds’ investment objectives, risks, charges and expenses carefully before investing. The Advisor’s ADV, which contains this and other important information, should be read carefully before investing. ETFs trade like stocks and may trade for less than their net asset value. Spartan Planning Group, LLC (“Spartan” or the “Advisor”) is registered as an investment adviser with the United States Securities and Exchange Commission (SEC). Registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the Adviser has attained a particular level of skill or ability. Indexes are unmanaged and do not incur management fees, costs, and expenses. Spartan’s risk-management process includes an effort to monitor and manage risk, but should not be confused with and does not imply low risk or the ability to control risk. There are risks associated with any investment approach, and Spartan strategies have their own set of risks to be aware of. First, there are the risks associated with the long-term strategic holdings for each of the strategies. The more aggressive the Spartan strategy selected, the more likely the strategy will contain larger weights in riskier asset classes, such as equities. Second, there are distinct risks associated with Spartan Strategies’ shorter-term tactical allocations, which can result in more concentration towards a certain asset class or classes. This introduces the risk that Spartan could be on the wrong side of a tactical overweight, thus resulting in a drag on overall performance or loss of principal. International investments may involve additional risks, which could include differences in financial accounting standards, currency fluctuations, political instability, foreign taxes and regulations, and the potential for illiquid markets. Investing in emerging markets may accentuate these risks. Diversification strategies do not ensure a profit and do not protect against losses in declining markets.