As we head into the final few weeks of the year, 2017 has been a banner year for stocks not just in the U.S., but around the world.
Investors have been focused on the upbeat fundamentals – corporate profit growth sparked by economic gains at home and abroad.
The U.S. economy grew at 3.3% in Q3, according to revisions released by the U.S. BEA. It’s the second quarter in a row that GDP has exceeded 3%, a feat that hasn’t occurred in the three previous years.
As Q3 concludes, S&P 500 earnings are up a solid 8.4% versus a year ago, according to Thomson Reuters. And analysts are forecasting a return to double-digit earnings growth in 2018.
Strong gains in the market sometimes encourage investors to plow headfirst into stocks. Others wonder openly if it’s time to take profits and move to the sidelines.
Let us take a brief moment to mention that market timing is a game best left to gamblers. We’ve had almost 60 all-time closing highs in the S&P 500 Index this year (LPL Research, St. Louis Federal Reserve). That comes on top of a string of highs the market has recorded since 2013. As shown in the chart below, if the final weeks of 2017 keep pace with the previous eleven months of the year, 2017 would finish with a total of 62 all-time closing highs.
Source: Bespoke Investment Group
A new high means one thing – stocks closed higher that day versus the prior day. By itself, it doesn’t foreshadow an imminent downturn as many bearish pundits have been suggesting.
Nevertheless, if you are concerned and want to talk, we're simply a phone call away. We’d love to hear from you!
Table 1: Key Index Returns
|MTD %||YTD %||3-year* %|
|Dow Jones Industrial Average||+3.8||+22.8||+10.8|
|S&P 500 Index||+2.8||+18.3||+8.6|
|Russell 2000 Index||+2.8||+13.8||+9.6|
|MSCI World ex-USA**||+0.8||+19.0||+2.8|
|MSCI Emerging Markets**||+0.2||+30.0||+3.7|
|Bloomberg Barclays US Aggregate Bond Index||-0.1||+3.1||+2.1|
Source: Wall Street Journal, MSCI.com, MarketWatch, Morningstar
MTD returns: Oct. 31, 2017-Nov. 30, 2017
YTD returns: Dec. 30, 2016-Nov. 30, 2017
**in US dollars
We hope you've found this monthly update to be helpful and educational. If you have any questions and would like to discuss your portfolio or other important financial matters, please give us a call at (330) 836-7000 or schedule an appointment here.
Merry Christmas and Happy New Year,
Jonathan Torrens CFP®
President and Chief Investment Officer
TCM Wealth Advisors
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The opinions expressed in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.