Let the good times roll

So economic data continues to surprise to the upside in the US.  Better GDP, better employment, better corporate profits.  Articles are again popping up saying ‘no worries’ to continued rally in the S&P 500, as no one believes it.  

Guess the message is to keep the good times rolling in the stock market.  

I think back to office life in 2009: my colleagues were asking me ‘what stocks have you picked for your retirement account/portfolio?’.  My answer?  Anything.  When valuations were at those levels, you didn’t need to be a genius to find some good stocks (or just SPY) to invest.  

Nowadays??  Finding ‘value’ is much more difficult.  And as bond yields continue to fall, the risk-free hurdle rate goes lower and lower.  That means high P/E multiples can be justified by analysts, and savers/investors have to keep shifting to higher risk carry (e.g. dividends, FX carry, short volatility).


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