The Market’s Wall of Worry

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The Market’s Wall of Worry

by | Apr 21, 2017

There are always lurking worries and concerns, reasons to prevent investors from having confidence in the long-term prospects of growth in the capital markets.  Most end up waiting until “it feels good” or the perfect time to invest and we know that never really happens.  Then, when stock prices are at all-time lows, few have the courage to step up and buy low at precisely the prime time of best opportunity.   The saying goes, “stocks are the only thing people don’t want to buy when they’re on sale”.   There is always something new, different and scary that we’ve never experienced before.  But looking back over history from the great depression and market crash of the 20’s and 30s’ WWII, Korean war, Vietnam, the Oil embargo, assassinations, a severe recession in the 70s, sky rocketing interest rates in the 80’s, terrorist attacks, impeachment proceedings, government shutdowns,  the list goes on……

An April, 2017 report from our Raymond James Market Strategist Andrew Adams says that, “Bull markets are said to climb a wall of worry, so we like to keep track of some of the headlines that investors must digest on a day-to-day basis. Over the last few years, there has been no shortage of uncertainty, but the stock market has soldiered on throughout it all to make new all-time highs again and again. Everything on the list below, even if it wasn’t outright negative, at least had to be analyzed by the market and received no shortage of coverage in the financial media. Yet, secular bull markets are tough to stop and the market’s resiliency is a clear sign of strength in our minds.
The U.S. debt downgrade, the fiscal cliff, the sequester, the government shutdown, Dodd-Frank, ObamaCare, rumors China would implode, the call that interest rates would skyrocket, Europe’s debt crisis, a potential U.S. debt default, Fukushima, the Arab Spring, Iran, North Korea, Egypt, Syria, Ukraine, airline disasters, natural disasters, strong, dollar, Fed tapering, QE ending, ISIS, Ebola, currency dislocations, oil collapse, the “Grexit,” China currency fears, Fed raising rates, Zika, “Brexit,” terrorism, social unrest in U.S., the U.S. election, “Quitaly,” Trump policy uncertainty, Syria again, North Korea again, etc. And yet stocks have stayed resilient and continued to make new all-time highs!!!”

Having a well-balanced and diversified portfolio of non-correlated asset classes can help reduce volatility but will often underperform certain benchmarks in various periods. 

Source: Raymond James Investment Strategy April 19,2017

All investing involves risk. There is no assurance that any investment strategy will be successful.Asset allocation and diversification does not ensure a profit or protect against a loss. A complete copy of the April, 2017 Investment Strategy Quarterly is available through our office. Any opinions are those of Thomas Fleishel and not necessarily those of RJFS or Raymond James.


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