Investment Wisdom At A Poignant Moment In History

• 
• 

Published Friday, September 14, 2018 at: 7:00 AM EDT

Share prices in America's 500 largest public companies closed Friday at 2904.98, near the all-time high.

The nine-year old bull market exploded in the last 33 months from 1810 to 2901. After a runup of more than 40%, the S&P 500 seems ripe for a fall, according to the narrative popular in the financial media.

What should you expect from stocks?

The popular narrative in the media is that the bull market is about to end, and that may be true. But it belies the long arc of history.

Despite what feels to some like a stock market that is overvalued, the S&P 500 actually has reverted to its long-term trend rate of appreciation, shown in the dotted red line.

Since January 1957, owning a share in America's largest 500 publicly-traded stocks showed a compound annual growth rate of 6.9% — nearly doubling in value every decade in the last six decades.

Things could be different this time. Past performance is no guarantee of your future results. That's the risk you take in America's capitalist system. For taking that risk, however, investors have earned a premium over the return on virtually riskless 90-day U.S. Treasury Bills.

Point is, in crises through the decades — even the cataclysm of 9/11, when many Americans thought life would never be the same again — the nation and U.S. shareowners recovered, and the value of their investments soared higher.

Rebalancing — allocating to asset classes that have not worked lately — is smart.

In fact, if you do not have a year or two of cash set aside to fund your current monthly expenses, then maybe you do want to raise some cash.

Keep in mind, the stock market may be on the cusp of a bear market or even a double-digit "correction" of 15%, but the economy is very strong, and the bull market could go on for years longer.

If you are a long-term investor, try to see beyond the next bear market, correction or major obstacle to the progress of humanity.

That's this week's bit of investment wisdom at a poignant moment in history.

---

This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.

This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial advice without consulting a professional about your personal situation.

Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. Past performance is not an indicator of your future results.

2023

• New Jobs Data Bolsters Hopes For 2024 Economy
• October Inflation Rate Slows, Spending And Income Cool, Making Further Rate Hikes Unlikely
• A Time Of Money Illusion
• Good News On Inflation Boosts Stocks For Third Straight Week
• The Terrible Truth About Investing
• The Goldilocks Economy Drove Stocks Higher This Past Week
• The Outlook For Investors
• More Economic Strength Sent Stocks Lower All Week​
• Four Observations About This Week’s Financial News​
• Not Too Hot Or Too Cold, This Week’s Economic Data Is Just Right
• S&P 500 Index Lost 2.4% In 3Q2023; Latest Inflation And Economic News
• Where The Boom No One Expected Gets Its Legs

• Latest On Inflation, Consumer & Business-Owner Optimism
• Slower Growth But Economic Outlook Remains Bright
• Labor Market And Inflation Drove Stocks Higher
• Costlier Homes Expected To Appreciate 4% Annually For The Next Five Years
• Leading Economic Index Falls For 16th Straight Month
• Tax-Sensitive Investment Planning In 2023 
• A Healthy Recipe For Growth Is Simmering
• Good News About The U.S. Economy
• The New Bull Market Has Broadened
• An Economy Goldilocks Would Definitely Live With
• Monthly Pace Of New-Job Creation Slowed In June, Which Is Good News
• Standard & Poor's 500 Gained 9.9% In Q2 2023 

2022

• 2022 Was The Worst Year For Stocks Since 2008
• 4Q '22 Is Closing Strong, But Recession Expected In 1Q '23
• A Key Principle In Fruitful Investing
• Plan Now For The Next Recovery
• Ending Inflation Will Take Months
• Economists Predict Lackluster 4Q22 Growth; Fed Algorithm Predicts 4.3%
• Amid Darkening News, Positive Economic Signs
• Stocks Soared This Past Week But Economic Pain Is Still Ahead
• Factors Blurring The Likelihood Of A Recession
• Weekly Investor Update
• Stocks Rose 4.7% This Past Week, Amid A Bear Market
• 105 Years Ago In Investing: Conditions Were Much The Same As Today

• A Timely Reminder Of Why You Take Stock Risk 
• Good And Bad Financial News: Weekly Investment Update
• A Financial And Tax Planning Strategy For This Week's Stock Market Plunge
• Having Trouble Tuning Out The Bad Financial Economic News?
• A Key Signal Of Strength At A Pivotal Moment In Economic History
• Despite Strong Jobs Report, Stocks Declined Last Week
• The Fed Risks A Recession To End Inflation, As Expected
• Stocks Snap Four-Week Win Streak
• Stocks Have Soared Lately, But What Should You Expect Near And Long-Term?
• Investing In An Economy Beset By Multiple Anomalies
• Despite Bad Economic News, Stocks Rose 4% In The Week Ended July 29, 2022
• Amid Bad Data Releases, Leading Economists Predict No Recession

2021

• Despite Pandemic, Stocks Closed 2021 With A 26.9% Return
• Tracking The Economic Boom
• Fed Changes Its Inflation Stance
• Despite Inflation And Omicron, A Booming Economy
• The Week's Financial News: Crosscurrents In The Economy
• After Breaking Records For Six Weeks, Stocks Dropped -2.3% Friday
• Already Higher Than Ever, Leading Economic Index Surged Again In October
• Five Observations For Investment Planning For The Decades Ahead
• Financial Economic Outlook
• S&P 500 Closed Friday At Record High Again On Strong Earnings Reports
• With Economic Recovery Intact, Stocks Are Near Record Again
• Are The Five Stocks Driving The Market's Great Returns Overvalued?

• Despite Gloomy Jobs Report, The Economic Outlook Remains Bright
• S&P 500 Rebounded Today After A Difficult Week And Month
• China Financial Contagion Fears Come And Go In A Few Days
• August Retail Sales Indicate The Recovery Is Intact 
• This Week’s Financial Economic News 
• Latest Financial Economic News For Investors 
• After Fed Inflation Policy Speech, Stocks Closed At New Record High
• Stocks Closed 1% Off All-Time High; Strong New Economic Data
• Stocks Broke Record High Again This Week
• U.S. Jobs Picture Improved, Covid Variant Risk Declined, And Stocks Closed Week At Record
• This Week’s Economic And Investment News
• Positive Earnings, Housing, and LEI News; Stocks Closed Week At A Record

2020

• Holiday-Shortened Week Ends With Stocks Little Changed, Despite D.C. Drama
• The Financial Economic Situation Now
• Bull Market Has Broadened
• Why Did Stocks Close At A Record-High After Disappointing Jobs Report?
• Americans Sit On A Mountain Of Cash Amid Pandemic
• For High-Income Earners And Families, Failing To Plan Is A High-Stakes Gamble
• Stocks Break Record, But Smart Money Is Focused On Taxes
• Wall Street Reacts To D.C With A 7% Weekly Gain
• On Election Eve, Here's The Economic Outlook
• Sizing Up Economic Prospects
• Two Good Economic Surprises
• October Surprise May Be The Economy

• Economic Signs Are Fine Amid The Distractions
• Poverty Rate Dropped Again In 2019; A Sign Of Progress 
• Stocks Dropped Last Week But Data Confirmed Economic Recovery
• Amid A Mixed Week For Stocks, A Strong Recommendation
• Is A Stock Bubble Bursting?
• S&P 500 Breaks Record For A Second Week
• S&P 500 Breaks New Record; Small Business Picture Is Different
• As If Coronavirus Never Hit, Retail Recovers 
• Confirming Recovery Is Under Way
• Despite Grim Headlines, Stocks Rose Sharply -- Why?
• The Paradigm Shift In Valuing Stocks
• Retail Sales And Housing Starts In June Reveal Recovery's Shape

2019

• A Spectacular Year For Stocks
• A Case For A Bull Market In 2020
• Good Economic News Again
• An Unusual Constellation Of Economic Surprises
• Longest U.S. Expansion Keeps Rolling
• Retirement Income Reality Check
• Find The Major Economic Trend Hidden In This Picture
• Is The New Record High In Stocks Irrational?
• Stocks Break New Record; Economic Outlook Clears
• Despite Frights, Can The Expansion Continue?
• Retail Sales Coverage Reflected The Narrow View Of The Media
• Small-Business Optimism Declines But Remains High

• Analysis Of New Employment, Manufacturing & Service Economy Data
• Quarter Ends Well Despite Trade War, Inverted Yield Curve & Political Crisis
• No Recession But A Slower Pace Of Growth
• Fickle Financial Headlines Brighten
• Economy Gets Bad Press Again
• Europe's Growth Problem And Your Portfolio
• Stocks Dropped 2.6% On Friday, As Reality Gap Seemed To Widen
• A Prudent Perspective On Recent Volatility
• A Tale Of Two Economies
• Amid Worries, New Equity Risk Premium Data Explained
• GDP Rose More Than Expected; Stocks Top Record Again
• Slower Growth Confirmed By June Leading Economic Indicators

2018

• 'Twas The Last Trading Day Before Christmas
• Stock Plunge Nears Bear Territory After Fed Hike
• A Last-Minute Reminder To Give Wisely And Charitably
• Key Facts About Tariffs, Interest Rates, And Economic Strength
• Fed Chair Extends A Dovish Hand, Lifting Stocks
• S&P 500 Slid Last Week, As Earnings Growth Is Recalibrated
• Last Chance For Pre-Retired Professionals & Biz Owners
• Amid A Swirl Of Controversy, Fed Policy Remained Stable
• More Good Economic News On Friday
• Is Amazon Keeping The Inflation Rate Low?
• Analyzing The Market Correction
• This Week In Stocks And The Economy

• Analyzing The Risk Of Stocks After The 6.9% Drop
• Fed Chair: "We Remain In Extraordinary Times."
• With The S&P 500 Up 7.2% In 3Q18, What's Driving Stocks?
• Widespread Misinformation Follows Household Median Income Report
• Investment Wisdom At A Poignant Moment In History
• Good Economic Surprises Happening Now
• Economic Facts To Prepare For The Elections
• Another Member Of Music Royalty Dies With No Will
• Top 10 Indications The Economic Outlook Is Brighter Than Expected
• Wealth And Economic News This Week (2-Minute Read)
• 10 Things: New Education Tax Breaks For A Child Or Grandchild
• The Truth About U.S. GDP Growth

2017

• 2017 Ends With S&P 500 Total Return Of 21.8%
• President Signs Historic Tax Cuts And Jobs Act; Stocks Drop A Fraction
• Good News On The Economy And A Tax Alert
• Tax Bill Drives Another Stock Market Record And Gives You To-Dos By Year-End
• An Eventful Week In Wealth Management
• Leading Economic Indicators Surge, Stocks Break Record High Again
• News Affecting Your Wealth Dominated The Headlines This Past Week
• U.S. GDP Growth Surprise Propels Stocks To New Record
• Why Does The S&P 500 Keep Breaking Records?
• U.S. Stocks Nearly Doubled In The Last Five Years
• The Big Economic News The Media Keeps Missing
• Trump Tax Plan Upends Year-End Tax Planning

• Key Senators Agree On A Road To Cutting Taxes This Year
• Year-End Tax Planning Could End With A Thrill This Year
• This Week's News About Wealth Management
• Stocks Dropped For Second Straight Week Amid Strengthening Economic Reports
• With Stocks Near All-Time High, Personal Income And Employment Data Are Released
• How Strategic Asset Allocation And Rebalancing Worked In The 12 Months Ended June 30
• Wall Street's "Top" Strategists' Recommendations Are Like Monkeys Throwing Darts
• Stronger Than Expected Jobs Creation But CNBC Reports "Trouble Lurked"
• S&P 500 Returned 2.9% In 2nd Quarter And 9.2% In First Half Of 2017
• Despite Distractions, Demographics Are Poised To Drive U.S. Long-Term Growth
• The Federal Reserve's Historic Economic Experiment Entered A New Phase
• Despite The Washington Sideshow, Stocks Closed At A New All-Time High

2016

• Visualizing The Risk Of Running Out Of Money In Retirement
• Wall Street's Strategists About As Good As Monkeys Throwing Darts
• Stocks Surge 2% Friday But Why Are They So Volatile Lately?

2015

• Despite A Lackluster Black Friday, Economic Fundamentals Look Good