The bulls are getting even more confident. Corporate earnings have been stronger than expected. In other words, the market is being driven by actual data rather than just optimism and wishful thinking.
The current decade is already shaping up to be one of the stronger periods for US stocks. That may sound impressive but history tells us strong periods are not as unusual as we sometimes think. The interesting part is that reaching my longer-term target does not require anything particularly heroic from here. It simply requires the market to continue growing at a reasonably healthy pace from here.
Come on, there is no shortage of things to worry about. Even if today’s worries disappear, a new set will happily take their place.
There will almost certainly be new headwinds in the coming months that we cannot see today. In my view, they should result in the usual pullbacks and corrections rather than the end of the bull market.
In case you want to know, I’m not particularly concerned about the Fed raising short-term rates before the election. The job market has started to soften while inflation has also been behaving itself a little better over the past two months. That should give the Fed some breathing room to remain patient for a while.
Nothing is guaranteed. This is also where some investors need some perspective. They need to understand what is happening and, more importantly, have someone provide the necessary context when things get rough. An anxious investor who understands the process can become a patient long-term type.
What I can do is provide the context, explain what is happening and help investors stay focused on the bigger picture rather than reacting to every bump along the way.