Content provided by J.J. Schenkelberg, CLS Senior Investment Portfolio Manager
It seems there has been some concern among retail investors about the fact that the markets have reached new highs. And if we are at new highs it has to go down, right? My dental assistant said her 18 year old son started an IRA a year ago. He won’t look at it because he just knows it’s going to go down.
I’m a little confounded by the notion that, because we are at new highs, we can’t go higher. We do believe we are likely to experience some continued volatility the next couple years as growth remains slow. However, as we have shown, valuations are not excessive and the underlying corporations are healthier (even financial companies) than they have been for the past 10 years.
We have experienced flat returns in the past, during the 1970’s and 1940’s. But undeniably, demographics and innovation lead global economies and markets higher, making new highs along the way. Otherwise, why would anyone want to invest in the markets? The only way can we make money is to continue making new highs. Something the market has done for the majority of the last 80 years. . .