Stock indexes ended the quarter at or near record highs and the bulls were running in what some call a melt-up. That melt-up continued until last Friday.

At the end of the third quarter hosts on the financial networks were positively giddy as major averages and indexes set new highs. They never mention the S&P 500 equal weight index (RSP), which was up 8.3 percent YTD though Q3. That is far lower than the 14 percent return on the cap-weighted index that set records thanks to tech stocks. But RSP, in which all 500 S&P stocks are treated the same, better reflects how most investors are doing.

Growth is beating the dividend payers. That’s why portfolios that depend on dividends are only marginally higher. An ETF that owns the S&P 500’s dividend aristocrat stocks (ticker NOBL) advanced 3.5 percent YTD through Q3 and an ETF of the least volatile S&P 500 stocks (ticker SPLV) gained 5 percent. Of course, what leads on the way up usually falls the fastest when the market heads south.

We are overwhelmed by data on every aspect of the economy, some of which has a short shelf life en route to revisions. There are reports that try to measure sentiment that by its very nature is subjective. Others are based on facts. Among the latter was the August reading on consumer prices, which showed what most of us already knew, i.e. prices are rising across a wide front. Goods, services, food, new cars, used cars, insurance, the works, all rising, but not gasoline. The next CPI release is scheduled for October 24.

A number of positives are creating a significant tail wind for the economy, so much so that third quarter GDP is likely to show growth of more than three percent. Few, including myself, expected that.

Business investment is a catalyst and understandably so because companies can deduct capital investments just like expenses back to the start of the year. People and companies now have a strong incentive to start major projects. Incentives matter.

Together with earnings growth, falling interest rates will create a good environment for stock investors. There are risks: one is that the economy could slow down and even flirt with a recession. Possible but a recession is not likely. The other: the Fed could be wrong again and lower rates too many times. That is more likely.

David Vomund is an Incline Village-based Independent Investment Advisor. Information is found at http://www.VomundInvestments.com or by calling 775-832-8555. Clients hold the positions mentioned in this article. Past performance does not guarantee future results. Consult your financial advisor before purchasing any security.