In this quarter-end chat, Dave Shotwell and Nick Nauta unpack what actually happened in Q3 2025 and why portfolios held up despite a steady stream of gloomy headlines. They cover broad market strength, the first Fed rate cut in September, what a government shutdown usually means for markets, and how to think about AI spending without trying to pick winners.
Our portfolio advisors at East Bay Investment Solutions provide the following summary, and as always, they try to take a balanced approach between reasons for optimism and pessimism. You can read their full report HERE or watch Mario’s video presentation HERE.
https://youtu.be/yoM8rETe5FI
Highlights


Broad gains: Most major stock and bond categories finished Q3 positive, while U.S. REITs lagged.


60/40 perspective: A diversified mix of global stocks and high-quality bonds continued to post solid results with less day-to-day swings than a pure stock approach.


Fed update: After a September cut, the policy rate sits in a middle range, giving room to adjust up or down as data changes.


AI reality check: Corporate spending tied to AI is robust, but future revenues remain uncertain. Diversification helps you own the eventual winners without betting the farm.


Shutdown noise: Historically, market returns during federal shutdowns have been mixed and often muted. Time in the market still matters more than headline timing.


Planning first: Your financial plan is built for many markets, not just the current one.


By the Numbers 


Fed funds target range: 4% to 4.25%


Cumulative AI spend (through last year): about $211 billion


Average S&P 500 return during shutdowns: about 0.11%


Year-to-date result cited for a 60/40 portfolio: 12.6%


Resources and next steps


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