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If there is one thing that I have learned in the past year it is that nothing surprises me anymore. Or at least it shouldn’t.
Records continue to get broken. Technology is advancing in ways that we never thought possible. Just because something has never happened before does not mean that it will not happen in the future.
As of the time of this writing in March 2017 the stock market, more specifically the Dow Jones Industrial Average continues to take new ground and reach new highs daily. How long can this last? The market can’t go up forever can it?
2016….what a year
2016 saw some crazy things. If I were an oddsmaker, I would venture to guess that a year like 2016 is one in a million.
I am a sports fan. Not a huge die-hard fan but I like to watch sports when I have the time.
Let’s start with NBA basketball last summer. The Cleveland Cavaliers won their first ever NBA Championship. This wasn’t completely unpredictable as they were a talented team but they had never won a championship in the history of their team. It was a big deal.
Next, we move on to baseball in the fall. The Chicago Cubs had not won a World Series in over 100 years. This team has had some rough years, really rough. I honestly never thought I would see them in a World Series in my lifetime let alone actually win one!
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To round off my sports analogies we go to the NFL. The Super Bowl technically took place in 2017 but most of the season is played in 2016. It was no surprise that the New England Patriots made it to the Super Bowl and won it. What was surprising was that they had the largest comeback in Super Bowl history. Another record broken.
The last crazy thing that I will mention for 2016 is the fact that Donald Trump won the presidency. I am not going into politics here at all but this still seems surreal to me. The guy was a reality TV personality just a couple years ago. If you would have told me 5 years prior that Donald Trump would be our next President I would have told you that you are crazy!
2016 is over and we barely get in to 2017 and then the Dow Jones hits the 20,000 mark!
Then on March 1st it hits 21,000!!!
Seriously, the odds for this chain of events to all happen in less than a year’s time has to be astronomical!
Anything is possible.
We can’t predict the future.
So how does all this relate back to the title of my post? This stock market rally that we have witnessed has been incredible. The realistic, conventional side of me says that this market has rallied for far too long. It may continue for a while longer but we will see a huge correction in the next year or two. History repeats itself right?
However, like I said earlier, nothing surprises me anymore.
If this one in a million chain of events that I mentioned above could happen then why couldn’t the Dow hit 25,000 or even 30,000 in the next 4 or 5 years? I don’t know, but I think it is possible. Wouldn’t you hate to miss out on something like that? Wouldn’t you hate to move your portfolio to very conservative investments because you think we are going to have a major correction and then miss out on something like this?
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What you can control
I don’t know what the market is going to do and I am not going to try to outguess it. There are only a few things that I have control over.
- How much I invest
- What I invest it in
- How long I leave it invested
What you can’t control
- What the stock market does or doesn’t do
- Possible changes in tax code affecting my investments
- Stupid things that happen in the world (war, bad trade deals, natural disasters, etc.)
The moral of the story is to focus on the things you can control. Continue investing for the long-term. Is their going to be a correction in the stock market? Sure. At some point it’s going to happen but who knows when that is.
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