This is not a pretty chart. It’s from Bespoke Investment Management, and it’s worth a look (“OS” and “OB” mean “over sold” and “over bought”, “N” means “neutral,” and horizontal lines show recent direction of recent moves. Green dots are positive; red are negative.):
Not a country in the world, developed or emerging, is up in the last year. Some places, like China and Italy, are in bear market territory (more than a 20% decline). Yes, the U.S. is down, too; but for now, it’s down the least of all countries on the list. And I think that will remain so for the rest of the year.
So what’s happened? Are we moving towards the end of the world? Well, in the long run, yes. But in the next year or so? I doubt it very much.
Here’s the S&P’s returns for the prior four years:
|Dec. 31, 2017||21.83%|
|Dec. 31, 2016||11.96%|
|Dec. 31, 2015||1.38%|
|Dec. 31, 2014||13.69%|
And if we go back five years to 2013, that year’s return was 32.4%.
What we have here, my friends, is, I believe, an old-fashioned, U.S. choice, grade-A, #1 market consolidation. At one point this year, do you realize the S&P 500 was up 40% since Trump’s election.
I don’t believe the market is “rolling over” – at least not yet. Outside the U.S., there are some real struggles that are affecting the outlook for global business and trade. But as the old market saw says, “Trees don’t grow to the sky,” and “bulls make money, bears make money, but pigs get slaughtered.”
So, don’t be a pig, and don’t be a nervous scared-y-cat, either. Have patience. Good things come to those who do.
Blessings, my friends.