A Terrific Start to the Year - January 23, 2019

The S&P 500 Index1 is up 13.6% since its most recent bottom on Christmas Eve. Year-to-date (thru 1.21.19), the index is up an impressive 6.5% (MarketWatch).

We can credit some of the performance to oversold conditions in late December. When short-term negativity is at extreme levels, upbeat news is likely to spark a move into stocks.

A look behind the recent rally  

  1. Fed Chief Jerome Powell is communicating a less aggressive posture.

  2. China/U.S. trade headlines have been cautiously encouraging.

  3. A strong December employment report signaled the U.S. economy isn’t slowing as quickly as some had feared.

  4. Oil prices have stabilized, and credit conditions have eased.

  5. The early read on Q4 earnings season has been cautiously upbeat.

Investor’s Corner and a tribute to Jack Bogle

Successful investors recognize that risks never completely dissipate, and volatility sometimes creeps into short-term trading.

Vanguard founder Jack Bogle, who recently passed away at 89 years of age, said in a September CNBC interview, “If you hold the stock market, you will grow with America.” If you attempt to time the market, “Your emotions will defeat you totally.”

Mr. Bogle recognized the need for a fixed income component. But his long-term approach has paid dividends for disciplined investors.