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The “Inevitable” Market Crash (Really?)


Summer officially ends on September 23 this year, but for many investors, the unofficial end of summer is Labor Day weekend. Wall Street’s biggest players are now closing their seasonal estates in the Hamptons, sending their children back to hugely expensive schools, and returning to their plush offices on Wall Street. Trading volumes on the various exchanges will start to increase, making market moves (either direction) will be more significant.

Coincidentally, what I call “Mini-Silly Season” is gearing up and will soon be in full swing. “Silly Season” is widely described as the several months prior to a Presidential election, when politicians and pundits everywhere are heard to say and do outrageous things.  I dubbed this off-year election cycle “Mini-Silly Season,” as those same groups act nearly as silly as they become during Presidential years.

My favorite recent entrant into this craziness was a headline that proclaimed, “No Bull Market has ever reached its 10th birthday.” That is absolutely true today, but consider this: None of my children have ever attained the age of 42. However, all three are alive and thriving, and I harbor every expectation that all three will reach age 42, and likely exceed that number by a large margin.

Perhaps a better headline should be, “Bull Market attains age 9, First Time in History.” The first headline evokes fear, and the second casts a positive image on a truly upbeat situation. That difference might be considered political, given “Mini-Silly Season” news.

Many statements (including statistics), are absolutely true, yet virtually meaningless. Intelligent and experienced investors should not succumb to craziness in the media. Markets are driven by the economy, profitability of companies, employment, wage growth, and optimism among consumers. All are at multi-year high levels.

There is nothing we can see in recent financial data to indicate a market pullback of any major proportion. Market corrections are normal, could happen any day, have happened recently, and should not be feared. That said, there is ample room for the markets to advance.

In the 9+ years of this Bull Market, the S&P500 Index, a broad measure of the U.S. stock market, is up well over 300%. That is simply a number derived from stock prices, and is not an indicator of a coming “crash” prior to the 10th birthday of the current Bull Market. That birthday will be on March 9, 2019. We will gladly tell you what happened after March 9, 2019, and not one day sooner.

Van Wie Financial is fee–only. For a reason.