Bull Market Things
In my previous role inside of Baird, I used to travel to see Institutional clients in Milan and Zurich. Two wonderful cities separated by the Alps and, you know, a different language and culture. Anyway, the flight between them is only like 50 mins but you can also travel by train and, my friends, it is spectacular. A slow, gentle, peaceful trip through the Alps that I would highly recommend to anyone who loves mountains, lakes, and soaking up a few hours of the best scenery in the World. Unfortunately for me, I was always concerned about meetings or the market or whether I bought the right kind of water because the sparkling and the still bottles looked identical (ugh, I hate sparkling, I feel like sparkling water makes you more thirsty). That slow, gentle, plodding trip was never truly peaceful for me but by taking those train rides I reaped a prized emotional reward, lifetime memories of Earth's natural beauty. You know what’s slow, plodding, and peaceful right now? The stock market.
According to the WSJ, the S&P 500 is in one of its longest streaks without a 1% daily move in the past five decades. Wow, that is a historic level of calm, take a look at the past few months and tell me that kind of price action isn’t remarkable. A steady march higher with almost no pullbacks. Is this kind of thing unusual? Are we looking at something out of the ordinary? I’d argue no, this is just how bull markets work, these are BULL MARKET things. Long stretches of gentle, plodding returns (with corrections along the way) that eventually add up to something big. Returns compounding on returns. Dividends compounding on dividends. Time in the market determining success. What if I told you we are only 5% away from this becoming the largest bull market of all time? (have to hit 3,498 on $SPX). We are, because of bull market things.
Economic data this week has all but confirmed recession worries from last year were premature. Jobless Claims, Retail Sales, Housing Starts, Philly Fed. All of them showed an economy that continues to wind its way through the mountains of worry. Have things slowed from previous years? Sure, of course they have, but they haven’t hit a point where recession calls make sense. One day they will, and zero people will call it in real-time (people who have been calling it for years get NO credit).
Let me ask you a question: If you’ve missed the bulk of the past 10 years, one of the longest most peaceful rallies in history, when would you ever own stocks? Are you going to be diving in with both hands when it's churning lower in a recession or it goes sideways for years because the economy is running on fumes? This bull market is going to end one day, that much I’m sure of. I’m also sure that the people who have been calling for its demise have cost their clients untold sums of money. No one knows when it will end, there is no magic 8 Ball. First Trust has the best chart on Bull and Bear Markets so let’s end with this thought: your train ride thru the Alps of stock markets will always include nervousness and agitation, it will always be beset by the tyranny of pessimists, just don’t forget to look out the window and appreciate the mountains of gains that come from Bull Market things.
- Does this decade have to be worse than the previous decade? Not necessarily, in fact Nick Maguilli argues it would be an outlier if it was.
- Good blog post on flipping the switch from savings to spending in retirement: “But what if you’re among the minority, those avid savers who reach retirement in good financial shape? This is the moment to reap your reward. But if you’re like many HumbleDollar readers, you’ll find it hard to flip the switch from saving to spending. What to do? Here are five thoughts”
- My man Doug Boneparth using volleyball to talk about financial goals. Love these kind of blog posts!
- Another one from my guy talking about AUM and younger clients / advisors: “And even though I can use AUM for my own firm, I can assure you that I am much more interested in using my clients’ personal and professional growth as measuring sticks”
- If you love Baby Yoda as much as I do (I'm sorry it's not possible) you gotta make this drink with me
- How do I NOT OWN THIS
Here are three things I love to have in my final link: Anything with Australians, I love them. It’s Winter so something with snow. Then, of course, someone doing something stupid. I found the trifecta!!!
Have a good night.