Contributed by Doug Walters
Last year investors were blessed with buoyant global stock markets giving them much to be thankful for (see Wishful Thanking 2017). This year, we must dig a bit deeper to remind investors there is still much for which to be thankful. I once attended a commencement speech by the “Life is Good” founders. They instructed the new grads never to forget that they do not HAVE to do things, but because of their unique advantages, they GET to. The same is true for us investors. We GET to experience market fluctuations because we have money to invest. We were lucky enough in life to have good paying jobs, an inheritance, or some other source of wealth. So even when the investment markets do not give us much to cheer about, we still have much for which to be thankful.
- Thank you Health Care sector… you have been a standout performer this year despite overall market uncertainty. It is good to see our higher medical premiums are benefiting us somehow!
- Thank you Fixed Income… despite the headwind of rising rates, you have been a reliable source of relative stability as equity markets fluctuate.
- Thank you U.S. Equities… as much as we complain about your recent pullback, you are still one of the best performing asset classes year to date (although that is not saying much).
- Thank you U.S. GDP… you have been growing consistently for nine years and are currently trending up. Keep on chugging!
- Thank you U.S. jobs… your unemployment rate has been falling steadily for nine straight years and is now just 3.7%.
- Thank you long-term performance… the 10-year stock market run we have enjoyed (up 300%+) is like gravy on an overcooked turkey, making the recent weakness infinitely more palatable.
- Thank you market volatility… while we sometimes blame you when stocks fall, without you, investors would not earn attractive long-term returns.
- Thank you Washington… the endless drama coming from within the D.C. border has been the inspiration for many Insights editions.
- Thank you clients and Insights readers… your patronage and regular feedback keep the Strategic Investment Team energized for another year!
Holiday Wish List
With U.S. stock gains modest over the past year, investors are justified in wishing for more next year. With that in mind, we have begun to put together an investor wish list for the holidays and beyond.
- Candy Land… Continued GDP growth and corporate earnings growth. We need this to help support the next leg up for stocks.
- Erector Set… We asked last year, and we will ask again for more bipartisanship on no-brainer legislation like an infrastructure bill.
- Pay Day… Wage growth to accompany the historically low unemployment. It does not mean much to have a job if you are not earning a living wage.
- Risk… More spread in bonds. We would like to see investors get compensated more for taking credit risk than today’s market is offering.
- Star Wars… Please Disney (DIS), return to your practice of releasing a new Star Wars movie on my mid-December birthday weekend every year. What happened this year??
- Pomsies®… Remember Fingerlings® from last year? Same idea. Place one of these in your palm, and you will forget all about market fluctuations (official website). Get one now; they are going fast!
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