Market update: What’s ahead for year end
As we head into the final quarter of 2018, we thought it was important to address what’s ahead in the financial markets for year-end. While economic indicators continue to be strong, some investors remain concerned that we’re nearing the end of this economic cycle. Below we address a few “market-movers” and what investors can expect through the rest of the year.
Longest Bull Market in History
In the aftermath of the Great Recession, and since March 9, 2009, the S&P 500 has been on a bull market run; in late August the market broke the record for the longest bull market in history. Now, many wonder when the market will turn and end this run. It’s impossible to predict when, but based on economic indicators, tax stimulus and reduction in corporate taxes, the economy is still growing and it looks like this bull market will continue to run at least over the next 12 months.
Tariffs & Trade War
When it comes to tariffs, we are at a stalemate and we’ll see who prevails. There could be potentially profound consequences if China doesn’t blink on agriculture. Tariffs from China can impact agriculture industries in the Midwest. They will increase cost while reducing the price of their products. We’re in a wait-and-see period with this, but the uncertainty isn’t a cause for concern just yet.
Political News
Political news has become a part of everyday life, and when a story breaks it can have a short term market impact. However, these daily moves are not impacting the overall financials of a company, just a knee-jerk reaction that doesn’t last long. In fact, the financial markets are a-political. The market doesn’t care who is president, if they get impeached or who is the majority in the House. Many people forget that President Clinton was impeached during the last major bull market run, so it’s important to not become overly focused on what’s going on in Washington.
The market is cyclical and at the end of each bull market comes a bear, but history shows that the market will come back around. When it comes to investing, it’s important for investors to create a disciplined approach and stay the course. It may sound boring, but it’s virtually impossible to time when to get in and out of the market as bumps in the road come along — and you have to be right twice.