Market's Finally Headed in the Right Direction!
I know intellectually that I shouldn’t pay attention to the day to day whims of the market but it feels so good to see the market finally headed in the right direction again-up! Yay! As you are no doubt aware the market has been in correction for the past 3 months with the S&P 500 dropping from a peak of 2872 January 26 to a low of 2581 February 26. Since then it’s been pretty much been going sideways until Friday of last week. Today the S&P is at 2722-not back at its January highs but headed in the right direction (see pic below-I’m so not a fan of the new Google Finance format BTW-hard to do long term research). I’ve heard full year forecasts of 2800-3000 for end of year 2018-here’s hoping.
Now I know what you’re thinking-I thought we were buy and hold investors, over the long term the market goes up 8-10% a year, and that we should celebrate these opportunities to buy stocks at cheaper prices? All true-but it I have to admit it’s psychologically disheartening to see my bimonthly 401k contributions make zero impact to my account balance.
The financial news media is attributing the market’s recent gains to a strong 1Q earnings season, rising tensions with Iran (Trump exiting the nuclear deal) which is boosting energy shares, and moderate recent jobs and inflation reports. For those of you thinking of investing directly in the Oil & Gas Energy sector-my advice is no for the long term-Big Oil is definitely not where I’d want to be a decade from now considering the Paris Climate Change Agreement and the rise of alternative energies. Demand will likely fall off a cliff in the coming decade. The Shale Oil guys are pumping away in West Texas and the Dakotas and big energy companies will eventually stop their cuts on capital spending and resume drilling. This coupled with the fact that recent OPEC discipline is not assured-eventually we’ll be in an over supply situation again. Not that readers of this blog would invest in anything other than total market US and international Index Equity and Bond Funds. Now I have to admit I do dabble in Technology Sector ETF’s in addition to my Total Market Funds. I believe strongly that companies like Apple, Google, Amazon, and Nvidia are the future-my own Fortune 500 company just switched us all over to the cloud and the developments in Artificial Intelligence are more and more breathtaking each year. These companies will continue to drive markets.
Anyway-Happy Friday and enjoy the recent boost in your 401k balances.