Flat to Negative Market Returns

Year to date the S&P 500 is slightly negative for the year closing  at 2669 last Friday versus 2695 January 2.  Ugh.  So disappointing after 2017's steady climb.  But just because the market is flat to down on the year doesn't mean I've stopped investing.  I've kept up my program of regular investments in index funds while telling myself that that I am saving for twenty to thirty years for now-not today or tomorrow-and that the day to day fluctuations of the market don't matter.  And since the market goes up over the long haul I'm actually buying shares more cheaply than I would be in a steadily rising market.

I know all of this but it's still disheartening not to see much progress in my account. Or even seeing my balance drop immediately after contributing.   Boo! I feel like my savings have been hovering at the same level plus or minus two to three thousand dollars forever!  I was hoping that earnings season would help the market get out of its rut but, as all of the CNBC pundits say nearly every day, the first quarter's strong earnings and last year's tax cuts were already priced in.   There's also the theory that the market is waiting for the outcome of the U.S. midterm elections  when investors will put their money in  businesses that with be successful  under the newly elected Republican or Democratic Congress.

And what the neck is up with bonds?!!!   Rising interest rates are no joke.  Literally  my  Total U.S.  Bond fund is  dangerously close to turning negative.  So much for safety... I am incredibly tempted to convert to equity.  I think I can handle the additional risk in my portfolio with stocks-which have the potential to double  in value in seven to ten years -rather than just keep up with inflation in a bond fund.  But I also know  that  we are at the end of the business cycle and could go into recession in a year or two when I'll be glad of  the cushion of bonds.   Buy and hold is easier some days than others.


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