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Higher Highs Can Mean Larger Losses


As we near the end of 2017, we want to reflect on what has been a very good year for the market and the U.S. economy. Some would say a near perfect year. Consider the following facts:

  • 2017 will be the 9th straight year of gains for US equities (which ties an all-time record)

  • The Dow has closed at an all-time high 66 times in 2017 (Highest # since 1995)

  • The S&P 500 is now up 13 months in a row (longest run since 1928)

  • US jobs, as measured by Non-Farm Payrolls, have now reached 86 months of consecutive growth (by far the longest streak in history)

  • The U.S. Unemployment rate is at a 16 year low.

  • Consumer confidence is at a 17 year high.

  • Inflation remains low with core CPI below 2%.

  • Earnings of US companies are at a record high and profit margins are near their highest levels in history.

  • Volatility has been extremely muted with rolling 12 month volatility measurements in U.S.