Here we are… the final day of 2019 and 2nd decade of the 21st century. The recent year provided stocks with their best annual performance in six years, but what a decade it’s been! The current bull market has endured over its entire tenure, albeit like most trends it was not without many periods where it looked over. If there was just one theme to characterize the economy and market direction over the recent 10 years, it would be “uncertainty”. Uncertainty and relentless skepticism was borne from a sub-par economic recovery; financial repression via historic-low interest rates; and what feels like extreme political unrest both in the US and abroad. But, financial markets often climb a wall of worry. 2019, and this current bull market, are testament to why time is each investor’s greatest ally and that one cannot allow themselves to invest based upon headlines or emotion. Investment success is all about “time in the market”, not “timin’ the market”.
On the eve of Christmas 2019 and the passing of another decade, why was the stock market performance so strong this year when the economic backdrop was so soft? How can stocks perform well when the economy is so worried about many things, including slow growth? How many investment forecasters predicted this year’s strength when the 4Q selloff a year-ago almost ended the current Bull market run; or that the Fed would abandon its rate hike cycle and instead cut rates 3 times? The financial markets always provide surprises which no one can time.