In The Lonely Bull

The path of least resistance for this stock market seems to be higher.  Too many investors, both individual and institutional, have been too cautious.  Some have been worried about the economy falling into recession, others feeling that 11 years of a bull market put odds against further gains; both wrong.  As the stock market climbs, these investors get pulled back in.  For individuals, there is the Fear of Missing Out, FOMO.  Institutional investors have the pressures of meeting performance goals and expectations and keeping their jobs.

There is a lot of money around for investments.  So many organizations need to make a return to meet pension obligations, charitable commitments, and on and on.  Individuals save for retirement, for big purchases, or perhaps for their legacy.  Whatever the need, returns are sought.  The stock market has been shrinking.  The number of public companies have declined, and many companies regularly buy back some of their outstanding shares.  This simply means that demand is increasing while supply is decreasing.

Corrections can and will happen and so will recessions. However, seventy percent of the time markets advance. If one only played the odds, they are obvious.  The Bull has not even mentioned the political impeachment process – it simply hasn’t been relevant to stock market performance; stay steady, my friends.

El Solo Toro

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