Will It Be a September to Remember?

NEW YORK ( Fabian Capital Management) -- As we approach Labor Day and look ahead to the final four months of the year, I think it's prudent to assess the state of the markets.

By analyzing both the opportunities and risks, you can make definitive choices for your portfolio in the context of a rational game plan to achieve your goals.

This year has been one characterized by significant changes in stocks, bonds, and commodities which have likely made an impact on your expectations for future returns. The shifting dynamic between each of these asset classes has brought to light the need for proactive changes to navigate these murky waters.

From an economic standpoint the data continue to point to positive trends. U.S. second-quarter GDP was recently revised up to 2.5% from an initial reading of 1.7%, which the markets reacted favorably to. In addition, job numbers continue to remain stable and we have yet to see the full impact of rising interest rates on consumers.

These are all net positives for the domestic economic picture and point to a confirmation of the Fed's plan to taper its asset purchases sometime this year. We all know at some point the free money train was going to have to pull into the terminal and we may get an announcement of that in September.

In the geopolitical context, the picture is much darker.

We are facing the potential for conflict with Syria, which has spooked the markets and sent energy prices higher. In addition, we are seeing continued weakness in emerging market stocks, bonds and currencies, which does not bode well for overseas investments.

All these factors have me concerned about the potential for a spillover effect into the U.S. markets, if conditions continue to worsen.

Stocks: Make the Most of This Pullback

The domestic stock market has had a fantastic run this year.

The SPDR S&P 500 ETF ( SPY) has risen over 21% from the beginning of the year to its August highs, and has since pulled back slightly. Currently the bellwether large-cap index is sitting just below its 50-day moving average.

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