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

*Annualized

**in U.S. dollars