I have long contended the old axiom, “the market climbs a Wall of Worry” is profound indeed. I came across this chart that illustrates this fact so well! Just take a look at the chart just going back from the onset of the financial crisis and it is really rather amazing. Look at all the events to worry about on that chart. It practically fills up the whole page.
I came across the chart below and though it would be timely to show you.
I know the recent volatility can be unnerving, but you can see from the chart below it is really nothing new. It just seems that way because we had previously gone through a period of unusually low volatility which may have bred complacency. Check out the chart below and you can see some of the large and frequent intra-year declines yet the stock market (S&P500) has continued to go up in the long term.
I have been asked repeatedly lately, “Why is the stock market continuing to go up?”
My answer is always the same: “Earnings growth.” As you all know, I have always said that is what fuels the stock market in the long term.
I came across this chart and found it funny. I wanted to share it with you.
Check it out!
As the Federal Reserve Chairs’ got shorter, interest rates have fallen. President Trump’s new nominee is now taller than its last. Could interest rates then begin to rise? My guess is yes, but the Fed Chair’s height size is purely coincidental, right?
As I have stated in the past, just like doctors, we need to give the consumer a checkup on a regular basis since our economy is approximately 70% consumer-based. We need to have a healthy consumer to fuel our economy, which would also help to move the stock market higher. If you look at the chart below, you can see the consumer continues to be in excellent shape.
We all have heard that “CASH IS KING”, but over the long term it has actually produced negative returns after you take into account inflation and taxes. If you look at the chart below you can see that stocks have actually been a good hedge against inflation and taxes.
I thought it would be a good time to re-revisit the charts below that I have used in two previous blog posts. The first being posted on October 1, 2012 and the second August 5, 2014 where they can be found on majerkoblog.com.
I recently read an interesting book entitled “Fooled by Randomness” written by Nassim Nicholas Taleb. It basically postulates that randomness or luck plays a bigger part in investing – not to mention in life– than most people realize. It is something that I’ve personally experienced over the years.
I came across this chart and it just confirms everything that I already knew. But it is very illustrative, particularly for my newer clients and readers. If you look at the chart below you can see almost every year there's a decline in the market. Occasionally, there are major declines. But guess what? The market (S-P 500) has had positive year-end total returns 24 out of the last 29 years.
My long time readers and clients know that I am a big believer in contrarian indicators. In essence, it is not following the herd. As Warren Buffett states “Be fearful when others are greedy and greedy when others are fearful”. If you look at the chart below, only a little more than half of US adults are invested in the stocks even after a long bull market.