When the Federal Reserve first suggested a gradual tightening of its monetary policy in May 2013, investors began to wonder if the long-running bull market would come to an abrupt end. #-ad_banner-#A quick spike in interest rates at the time gave a sense that times were indeed changing. Yet investors end up shrugging off that noise: The S&P 500 rose an impressive 22% between July 1 of last year and June 30 of this year. Toss in dividends and investors garnered a 25% total return — roughly the amount investors should expect to garner over a three year period in… Read More
When the Federal Reserve first suggested a gradual tightening of its monetary policy in May 2013, investors began to wonder if the long-running bull market would come to an abrupt end. #-ad_banner-#A quick spike in interest rates at the time gave a sense that times were indeed changing. Yet investors end up shrugging off that noise: The S&P 500 rose an impressive 22% between July 1 of last year and June 30 of this year. Toss in dividends and investors garnered a 25% total return — roughly the amount investors should expect to garner over a three year period in normal times. But these are not normal times. The stunning 191% gain for the S&P 500 since bottoming out in March 2009 is remarkable in light of the fact that the subsequent economic rebound after the Great Recession has been quite tepid. Low interest rates, a huge amount of global liquidity and very high corporate profit margins all get credit for the bull market that has exceeded the wildest expectations of even the most aggressive market strategists. At this point, it might seem the wisest path to sit back and enjoy the ride, waiting for another 20% gain over the… Read More