2018

What we’re experiencing in the financial markets right now is unique while at the same time very similar to previous bull markets. Those contending that this time is different are correct. We’ve never had synchronized global monetary easing on the scale we’ve witnessed over the last few years. This is new, and without question one of the primary drivers of this epic bull market run. The liquidity created by central banks around the world has created the desired effect – inflation. The only problem is that it hasn’t translated into price inflation to the extent desired (by central bankers) which…

Bubbles are dynamic and as a result, different each time. But one common theme amongst them has been the tendency for interest rates to play a role in their eventual demise. Looking back 30 years, there seems to be a causal relationship between rising rates and poor stock market performance. More times than not when the 24-month change in 10-year treasury rates spiked upward, stocks ran into trouble. Practically every sizable correction in stocks was preceded by an acute increase in interest rates. But rising rates don’t just signal possible trouble for stocks, they also mean there’s a current problem…

This current bull market started in March 2009, making it the second longest bull market in investment history. You can just glance at a chart of the S&P 500 and see that bull markets, especially big ones, do eventually come to an end. What has been unusual about this particular bull market is not only the duration going on nearly 9 years now, but also the relatively low level of volatility we’ve experienced along the way. This part of the market cycle has a sinister way of lulling people into feeling like there’s less risk in the stock market than…