A Very Important Stock Strategy Overlooked in The Bull Markets – Alliance Capital Management
The market action is up considerably in
2018. This is shedding light on an overlooked investment strategy: Investing
into the markets more frequently. Additionally, it is very important not to be
influenced by the day to day market news and fluctuations.
Following a six-month hiatus, the markets
are back at record highs. That is 1 landmark! Another noteworthy accomplishment
is the extended period of bull market -- today nearly 3,500 days and going
strong -- the longest bull run in history!
A cocktail of reduced corporate taxation,
higher corporate earnings, a burgeoning labor market and waning commerce tariff
worries have created a perfect storm for a continuing stock exchange rally.
"A great deal of the bad news that the markets were digesting has begun to
go away," explained Brad McMillan, chief investment officer of Commonwealth
Financial Network, speaking about the Trump government's recent trade deal with
Mexico.
The progress of agreeing a trade deal with
Mexico is showing that experts concur, tariffs were the major worry for stocks
that season. After all, the market continues to add approximately 200,000 jobs
every month, the Federal Reserve insists its pace of rate hikes will likely be
slow and S&P 500 businesses are on course to post 25% pre-tax earnings
growth for its 2nd quarter -- the second greatest growth since the third quarter
of 2010, according to FactSet.
That is why McMillan stated he sees the
S&P 500 climbing to 3,000 at the end of the year. Additional Wall Street
strategists have are in sync. Barclays expects the S&P 500 to rise to 3,000
by year's end; UBS sees 3,150; and Canaccord Genuity expects 3,200.
The S&P 500 broke 2,900 on Tuesday (28
Aug), a nice rebound from its February low of 2,581. The declines in February
came after quiet period in the markets throughout 2017 -- and early 2018 --
where stocks rose continuously with few noticeable pullbacks.
These record highs reveal the necessity of putting
money frequently into the marketplace. "With U.S. large-cap stocks, even
if you had been trapped in the hype back in late January, the marketplace's
last record high, and purchased shares, you would wind up 3.5% today,"
Colas mentioned. "If you'd bought at the end of each month at 2018, you
would be up 5.8 percent. That is 67% better than attempting to time the
market"
Your portfolio is going to tell you when
it's time to do something," Liz Ann Sonders, chief investment strategist
at Charles Schwab said. "You don't have to worry about what my views are
on the market or any other pundit that's out there."
Alliance Capital Management
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