Our Latest Market Commentary
This is Part-2 of a two-part series. To find Part-1, click here.
Last week, we discussed the Ned Davis Research Global Recession Indicator and how it’s been unbelievably accurate since 1970…until last year, when it forecasted a recession that never came to fruition. We also discussed the fact that we’re living in year-9 of the current bull market, which arguably began in early-2009 – and that market crashes take place every 7 years, on average, with an average loss of just under -42%. Now, let’s take a look at what could end up making the 2010’s a true “decade of firsts.”
The last two years were a strange time for the stock market. In May of 2015, the market barely scraped out a new high, squeezed out a 3% gain through the first 4 ½ months, and proceeded to move sideways with a downward bias for well over a year. Even when summer of 2016 set in and things started to smell a little rosier, the upcoming election put a spell on the market, causing uncertainty that sent the market down more than four percent before election day. It wasn’t until after the election that the market decided to buck the risk of a market crash and the probabilities of such an occurrence fell swiftly in the weeks that passed
So here we are today, living in the 2nd longest bull market in history – second to only the late-80’s and 90’s, when the market rocketed northward for 14+ years. In order to “beat” the 1st place finishing dot-com run of the late-90’s, the market would have to continue northward, without a single crash, from now through 2023. Seems crazy, but I suppose anything is possible.
Healthcare repeal and replace, deregulation, tax reform, the fiduciary rule… these are all the hot topics running across the airwaves since a new administration stepped into The White House. When Donald Trump won the presidency back in November, it was a widely held belief on Wall Street that the market would likely find a top and come crumbling down. I was in that camp as well, and certainly wasn’t willing to take the risk to be “all in” the market prior to such a historic (and potentially catastrophic) event.