Expansionary Cycle

It’s rational to assume that negative developments like social unrest, violence, and wars would roil the markets, but that’s not necessarily how things have played out historically. To the degree that investors feel confidence in markets rising, and the profitability of certain sectors of the market, financial assets can weather more societal turbulence than we’d think. The real issue for markets, especially from already lofty valuations at the end of a lengthy expansionary cycle, are those two factors just mentioned – confidence and corporate profitability. It’s really not until those two things are disturbed enough that markets go down and…