Home About Archives RSS Feed

The Independent Investor: Why Stocks Continue to Climb

By Bill Schmick
iBerkshires columnist
As we approach the end of the year, most investors are both dumb-founded and pleased at the stock market's performance. President Trump and his followers would like us to believe it is all because of them. Hog wash.
 
There has been no substantive legislation since the new administration took office. Promises can only take us so far. Some say any further upside will be short-lived, because living on hope alone has already taken us too far. And yet, somehow the economy is still growing, even gathering momentum.
 
Recall, too, that Donald Trump and the Republican Party gained power on the promise of undoing many of the trade agreements the U.S. has forged over the past 40 years. This was perceived by foreigner leaders (and their people) as a huge negative for the world economy.
 
Despite the president's posturing and his actions to pull the U.S. out of the TPP and now NAFTA, nations like India, China, Japan, most European nations, as well as many emerging markets, have experienced stock market gains that have left the U.S. averages in the dust. This happened despite the President and his tweets.
 
So, if it isn't Trump, why are stock markets going higher? The truth is that 45 of the largest economies in the world are experiencing growth at the same time. This has not happened for over a decade. As that growth continues, global equities gather more steam. However, as time goes by, some will do better than others.
 
But before you give credit, make sure you know where and who to give credit to. Don't look to the world's elected leaders as the cause, despite their claims. Quite the contrary, most elected officials worldwide did nothing. Some, like those in the U.S., actually prolonged the crisis by cutting government spending, despite the pleas of our central bankers to do more, not less, in an effort to save the country.
 
The real heroes of the day were central bankers. Ever since the financial crisis, central bankers, who are appointed officials and not answerable to short-sighted politicians, saved our collective bacon. The U.S. Federal Reserve Bank, under the leadership of Ben Bernanke, single-handedly led the world, step by painful step, out of the worst economic disaster since the Great Depression. Other bankers around the world, after some hesitation, followed his lead and the rest is history.
 
Sometimes we forget this, especially when leaders who did absolutely nothing but hinder this effort, now take credit for the work of a handful of officials around the world. Here in the U.S., the Fed-engineered recovery has allowed corporations to not only build a huge war chest of cash in the event of another downturn, but also generate record profits and sales. Unemployment has also declined to historically low levels while inflation remains benign. The same thing is occurring (with a lag) around the world.
 
And now, we find the Fed once again taking leadership in its effort to normalize monetary policy. So far, they have been doing a bang-up job in that effort. Notice that they have done that while our politicians on both sides of the aisle continue to bicker, posture, but accomplish nothing.
 
So given the heated recriminations and political disagreements that are sure to crop up around the dinner table this Thanksgiving, why not raise a glass and toast the real heroes who have given us this year of prosperity and plenty. Hip, hip, hurrah to central bankers everywhere!
 
Bill Schmick is registered as an investment adviser representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires.  Bill's forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.
0 Comments
     

Support Local News

We show up at hurricanes, budget meetings, high school games, accidents, fires and community events. We show up at celebrations and tragedies and everything in between. We show up so our readers can learn about pivotal events that affect their communities and their lives.

How important is local news to you? You can support independent, unbiased journalism and help iBerkshires grow for as a little as the cost of a cup of coffee a week.

News Headlines
Biz Briefs: Red Lion Inn Partners with Stash Hotel Rewards
Berkshires Beat: BSO Going 'Into the Forest' for Pleasant Valley Concert
Hinds Sets Community Outreach Events for October
Mount Greylock Building Committee Nixes Overflow Parking Proposal
New Men's Group Piques Interest at Coalition Forum on Relational Violence
McCann Does Well on MCAS; Skills Chapters Update Committee
Adams Officials Say Infrastructure Needed to Deal With Flooding
Northern Berkshire Santa Fund Joining With Northern Berkshire United Way
MCLA Men's Golf Competes at NAC Championships
Williams Women's Golf Comes Back to Win Fall Finale

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (270)
Independent Investor (368)
Archives:
October 2018 (2)
October 2017 (3)
September 2018 (4)
August 2018 (9)
July 2018 (2)
June 2018 (8)
May 2018 (8)
April 2018 (7)
March 2018 (6)
February 2018 (7)
January 2018 (7)
December 2017 (8)
November 2017 (5)
Tags:
Crisis Rally Greece Stocks Debt Banks Euro Federal Reserve Congress Wall Street Recession Fiscal Cliff Taxes Pullback Markets Jobs Currency Commodities Selloff Europe Election Interest Rates Economy Housing Stimulus Metals Deficit Stock Market Retirement Debt Ceiling Bailout Energy Europe Japan Oil
Popular Entries:
The Independent Investor: Don't Fight the Fed
@theMarket: QE II Supports the Markets
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Will the Municipal Bond Massacre Continue?
Recent Entries:
@theMarket: Will China Be Next?
The Independent Investor: Estate Planning Is for All of Us
@theMarket: The Market's Last Quarter
The Independent Investor: Credit Freeze for Free
@theMarket: Record Highs and More to Come?
The Independent Investor: Dogs and Their Cars
@theMarket: September's stock market
The Independent Investor: How Prepared Are You to Sell Your Company?
@theMarket: Record Highs Coming Up?
The Independent Investor: Should You Bury Yourself?