Greetings! I hope that this finds you well and enjoying life.
The stock market is on a historic tear and continues to break records. As investors we wonder is there no end in sight to these gains? Indicators are favorable with few headwinds at present. Corporate earnings are up and capital spending and business investment are increasing. Economic growth is strengthening with GDP reported at 3.1% for second quarter and 3% for third quarter. Unemployment is at a seventeen year low. President Trump’s pro-growth, anti-regulatory policies has investors giddy with anticipated growth potential in corporate profits. The economic effects of the major storms which struck our mainland this year have been surprisingly minimal. Worldwide we see a lot of economic stability. And on top of all this, it’s no stretch to believe, that if Congress can implement meaningful corporate tax reform it should have a positive effect on the economy as well. The big question right now is if they can.
At this phase in the stock market cycle, it’s easy to get caught up in the emotional euphoria that market gains and the media bombards us with. It is a force that we almost can’t help but get caught up in but that we must reckon with. Cycle is the key word in this writing today. It’s important to remember that the market just like the economy is always based on the cycle of peak to trough to recovery. It’s as consistent as the moon and the tides, the rotation of the earth and the flow of the seasons, in that it ultimately always cycles, but it’s inconsistent as to when it cycles. That’s the problem. We don’t know with surety where we are in the cycle and we can’t count on the stock market in the short term. That’s why now more than ever, it’s important to stick to your long-term investment plan. It’s important to make financial decisions based on your unique investor profile, which should be established based on your particular goals and objectives. At the end of the day, this discipline is all that we have control of.
If you have questions or comments about the above or feel that we can help with your retirement in any way, don’t hesitate to call.
Jeff Christian CFP, CRPC
If you don’t know where you’re going how do you expect to get there?