Approaching a Record - April 17, 2019
Let’s review the numbers. On Monday April 15th, the S&P 500 Index1 closed within 0.86% of its September 20th high (St. Louis Federal Reserve data).
- The index is up 15.9% year-to-date (as of April 15).
- From its December 24th low, the index is up 23.6%.
- Growth has slowed but data aren’t pointing to a recession.
- Favorable headlines suggest a U.S./China trade deal is more likely than not.
- The Fed isn’t projecting any rate hikes this year and plans to stop shrinking its balance sheet by September – sooner than expected.
- Early read on Q1 earnings season – firms are topping low expectations (Refinitiv through 4/16/19).
- Geopolitical turbulence.
- Negotiations with China could breakdown.
- Inflation could unexpectedly accelerate, forcing the Fed’s hand.
Timing the market is exceedingly difficult. The ferocity of last-year’s selloff caught most analysts off guard. Few predicted the strong bounce.
What we know – long-term, disciplined investors understand stocks have a long-term upward bias.
Annual performance can vary widely, but since 1950 the S&P 500 has racked up gains in 74% of the years, with a compounded annual return of 12% (Macrotrends/Yahoo Finance data).