Just when investors were getting nervous, the end of last week provided a life raft.
The Standard &Poor’s 500 stock-index bounced back above 3900, keeping the index above the 200 day moving average.
I think that is significant as we now have established 3900 as the support level.
Las summer we were challenging 3600.
In the fall the support moved to 3800 and now 3900.
There is speculation that the talk of bonds drawing off investor dollars was misplaced.
I was one of those, but you have to acknowledge that there is a whole generation of stock traders that know nothing but trading in equities.
We have had low to no interest rates since 2008.
That is a generation and a half.
I am not sure what could change that mindset.
The only thing to move the market down would be a recession.
I don’t see that given all the earnings that keep coming.
We are not getting great earnings forecasts, but being conservative in your projections is a more reasonable means of dealing with the unknown.
Housing has slowed, but there are still homes being built.
You see agriculture forecasting big earning increases.
This does feel like prices rising, but not the hyper inflation of the 70s.
It is uncomfortable, but not debilitating.
I am sure there will be those who say it’s easy for me to say, but I watch as I go out.
As high as prices have climbed for groceries, I am always waiting in line to get checked out and that is in the self-check line.
None of those baskets are 15 items or less.
A huge factor in our economy is energy and it continues to find West Texas Intermediate below $80 and natural gas below $3.
This is no bargain, but a substantial improvement over last year.
My utility bills were about what they were last year.
All I am saying is that while it costs more, it is far from what I expected.
Being a value investor, I missed the train that pulled out of the station.
That is not to say that I am not fully invested in equities, it is just that there were several companies that I did not pull the trigger on, assuming the markets would go much lower.
I won’t say that we can’t have a major pullback, but it is getting harder to believe that is coming any time soon.
I am stuck as this market trades above a multiple that I am comfortable to put my savings into.
I am waiting on the next couple of rate increases to put money in interest-bearing investments, which I have not done in decades.
I do not see the Federal Reserve letting up on interest rates.
We will see the Fed Funds rate above 5%.
It is not great gain but I will take that for a portion of my savings.
Outside of that, it is just trying to find stocks that I feel were punished too much and will pay me a dividend.
There will always be those, as there are thousands of stocks performing differently.
