“Reports of My Death Are Greatly Exaggerated”

This well-known quote is reputed to have been Mark Twain’s response to news of the publication of his obituary.

Investors might want to note that premature obituaries can also occur in the world of stock market punditry.  Recall that throughout the fourth quarter of 2018, conventional wisdom was suggesting that the stock market had peaked and was on the way to a significant decline.  Not surprisingly, amid a drum beat of negative opinion, markets did suffer a material retrenchment during the fourth quarter.

With the start of a new year, economic reality surfaced.  The major averages recorded significant gains during the first quarter of 2019 and by the end of April, the S&P 500 had reached an all-time record.

Obviously, markets do fluctuate, but the long term trend has been generally positive, with the S&P 500 recording compound average annual gains of approximately 10% since its inception in 1926.  Investors might be well advised not to place too much reliance on self-appointed Cassandras.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA