Recently I have been asked repeatedly “Why are the Markets going so much faster than the economy” Not only is this question a good one, but this has been a market that has been so happy it rarely pulls back.
Here is my best answer:
Heads I win, Tails I Win – NO DOWN
One very possible reason markets continue to behave so “Goldilocks” is the following belief:
- The economy will grow into market valuations, if not..
- The Federal Government will save us if the economy falls i.e. More stimulus
We are extremely positive folks, but if history rhymes at all with prior periods of similar believe, there is great danger in this “no downside” thinking.
Part Two … Proof or maybe Poof is better as our experiences beg to differ!
Have a Great Day!
John A. Kvale CFA, CFP
8222 Douglas Ave #590
Dallas, TX 75225