What We Know Halfway Through 2017
With great speed, we are past the half-year mark of June 30th. Whatever the goal post – whether it’s a birthday, an anniversary, a graduation, or the end of a decade – it’s a very human tendency to take stock of things and reflect on what has unfolded during a specific period of time.
So what has 2017 delivered to us through June 30th? U.S stocks are up 9.3%, European stocks are up 13.8%; inflation is low and volatility is low; corporate earnings are strong; employment numbers are not great but good enough. But that’s over 6 months, and the shorter the time period, the less its relevance, and the more meaningless it is with regards to the future.
If we extend the time period back to 2009, we find that we are in the ninth year of an economic expansion (though by historical standards it has often been a weak one). The S&P 500 has not had a negative year since 2008 and though it has seen a few corrections of 10% or more it has not seen a bear market drop of 20%. It is up over 200% since the beginning of 2009, meaning that investors in this index saw their money triple during the past 8 and ½ years. Inflation and interest rates have remained low. Employment has improved, though slowly.