The End of the Financial Year
As we head into the final lap of 2017, it’s been a banner year for stocks not just in the U.S., but around the world.
Investors have been focused on the upbeat fundamentals — corporate profit growth sparked by economic gains at home and abroad.
The U.S. economy grew at 3.3% in Q3, according to revisions released by the U.S. Bureau of Economic Analysis. It’s the second quarter in a row that GDP has exceeded 3%, a feat that hasn’t occurred in the three previous years.
As Q3 concludes, S&P 500 earnings are up a solid 8.4% versus a year ago, according to Thomson Reuters. And analysts are forecasting a return to double-digit earnings growth in 2018.
Market Timing is Best Left to Gamblers
Strong gains in the market sometimes encourage investors to plow headfirst into stocks. Others openly wonder if it’s time to move to the sidelines.
Let’s take this moment to tell you — again — that market timing is a game best left to gamblers. We’ve had almost 60 all-time closing highs in the S&P 500 Index this year. That comes on top of a string of highs the market has recorded since 2013.
A new high means one thing — stocks closed higher that day versus the prior day. By itself, it doesn’t foreshadow an imminent downturn.
Table 1: Key Index Returns
Source: Wall Street Journal, MSCI.com, MarketWatch, Morningstar
MTD returns: Oct. 31 – Nov. 30, 2017
YTD returns: Dec. 30, 2016 – Nov. 30, 2017
**in U.S. dollars
Other articles filed under Market Commentary
October 11, 2018 - By Bob Veres Yesterday’s market declines — the Dow down 3.15%; the S&P 500 down 3.29%; and tech stocks, as represented by the Nasdaq index, off 4.08% — were entirely within the normal range of mini corrections, which we’ve experienced...
October 11, 2018 - Inflation! Interest Rates Rising! Trade Wars! Recession! Have you seen any of these words in headlines lately? Of course you have, because advertisers need to get paid. Do you wonder how these future possibilities affect what you should be doing...
September 15, 2018 - The month of August marked an important milestone for the long-running bull market. On August 22, the bull market, as measured by the S&P 500 Index, extended its run to 3,453 calendar days, becoming the lengthiest bull market in history,...
September 6, 2018 - Have you ever embarked on a home improvement project? You are confident you can complete the task, but you are unfamiliar with the details. A “how to” clip is usually available on YouTube, but there isn’t a practical way to...
July 31, 2018 - “Our new Constitution is now established, and has an appearance that promises permanency; but in this world, nothing can be said to be certain, except death and taxes.” It is a quote that comes down to us from Benjamin Franklin,...
- Trust Basics