Ebola, Ukraine, ISIS, Syria, our dysfunctional Congress, border control, Afghanistan, natural disasters, Iraq, North Korea, China, Russia. Feeling good about the world we live in today? Probably not much, if any, better than when we compiled a similar list a few years ago. Greece, the Fiscal cliff, jobs, China, North Korea, H1N1, Iraq, Sequester, housing crisis, Afghanistan, recession, Iran. Neither list is all-inclusive, nor would it ever end if we opened it up to suggestions. The point is, there will always be bad news. Heard that one before? I think I’ve uttered that a few times in past blogs, and probably will in future ones. Meanwhile, the stock market continues to move in one general direction: up. Granted, there are down days, weeks, months…just enough to remove those investors from the market that cannot bear the perceived risk and wide range of potential outcomes. For those who stick around and hold to their long-term plan, rewards continue to be reaped. Since the market bottomed back in March of 2009, the S&P 500 is up at an annualized average of nearly 25%. Why? Because while short-term market movement is typically driven by immediate fear and greed, long-term results are primarily driven by the corporate profitability afforded via the freedom of capitalism. Need a shot of optimism to balance out our earlier list?
- The U.S. had 4.7 million job openings in June, the highest number since 2001
- Single-family home sales are up over 12% from a year ago, with new home sale prices continuing to rise (3% versus last year at this time)
- Cash on corporate balance sheets waiting for deployment, along with overall profitability, are at all-time highs
- Durable goods orders were up 22.6% in July, the biggest increase on record going back to 1958
- Personal income and spending are up 4.3% and 3.6%, respectively, over last year
Our economy is steadily improving and growing. Technology is booming. The entrepreneurial spirit is thriving. The current bull market has lasted over 2,000 days, the fourth-longest since 1928 (as measured by the S&P 500). Bad news will come, along with new bad news to replace the old bad news. Just know there will be an assortment of good news underlying those headlines that will not typically attract much attention. Have a plan and stick to it. Stay diversified.
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