Many people are getting worried about the new record highs in the stock market. As I write this, the market is ending up with one of the best quarters on record. When will it end, everyone wants to know?
While I am no market predictor and do not profess to be one (I do not play one on TV…yet), listening to those professionals who have been through these markets for over 40 plus years, gives me encouragement to hang in there with this current run up on the stock market.
It would seem that the money which has been sitting on the “sidelines” from big corporations and from individuals too scared to move it out from under the mattress are now feeling somewhere more confident and putting it to use in the stock market. And there is more of it to be put in the market in the next couple of years.
On the other hand, it is highly unusual for a “bull market” to last as long as this one has, yet records can be broken. The low interest rates we are currently enjoying (and from the lips of our new Fed Chair, Janet Yellen, it will be the case for the near future) would suggest the potential for more upward movement.
Of course, should political hotspots and international upheaval continue to escalate, the effects of that turmoil on the American stock market are to cool it off. And it could be very precipitously.
As always, we believe proper asset allocation across different investment classes is the best remedy for rising and falling markets. And it needs to be consistent with your risk profile, loosely defined as an investment portfolio designed so you can sleep comfortably at night. We’ll soon see…