On March 9, 2009, the Dow Jones Industrial Average closed at 6,547. It marked the bottom of the last bear market. Even with the December 2019 down-turn, on February 28, 2019 the Dow finished the day at 25,916, less than 1,000 points from its prior peak.
The bull market turns ten years old this month. How much life is left in the bull? We are in the latter stages of the cycle, but much will depend on the economic fundamentals going forward. With the Fed on hold, inflation contained, and the economy moving forward, the fundamentals are currently sound. But never discount volatility. Stocks seem to take the stairs up and the elevator down. In the spirit of the celebrating the last ten years, let’s look at a partial list of the worries that temporarily sidelined the bull, but didn’t sideline those with a long-term view:
The European debt crisis...Greece...global growth worries... U.S. growth is slowing... China is slowing... the dollar is too strong...Japan earthquake/tsunami/nuclear disaster... U.S. debt downgrade... fiscal cliff... Obama will be re-elected...Trump will get elected... Hillary will get elected... the Fed will end bond buys... Fed will start hiking interest rates...falling oil prices... Ebola scare... Russia invades Ukraine...North Korea... ISIS... Syria... Brexit... trade tensions... acrimony in D.C.... and stocks have risen too quickly.
Shorter-term risks never completely abate. But Warren Buffett’s message has been consistent. Don’t bet against America.
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