June 10, 2021
By Scott Wohlers
With all the attention on meme stocks and the rank speculation surrounding them, some investors are losing sight of good trends in the general market. For most companies, earnings are improving dramatically. Price/earnings ratios are coming down. Even many highly valued companies are growing into their valuations. A broader culture of investing is developing, even if inevitably some parts of it are speculative. Interest rates remain low providing both opportunities for business recovery and investment, while pushing capital toward higher risk opportunities (stocks).
There will be setbacks, a rolling correction, etc., however, the underlying trends are for higher prices, and they are increasingly justified. With continuing economic recovery, the financial foundation improves too. Supply chain issues will gradually wane and so will some of the inflationary pressures they helped create. If you want to gauge how markets judge inflation, look at interest rates, hardly a blip. So, be invested, remain invested, and stay steady my friends.
The Lonely Bull
