| Some Advice from Decades Ago Continues to Be Good Today! No matter how much things change, everything stays the same. I am paraphrasing Freud, but it could just as easily describe the stock market. Basically, politicians are rewarded by having the US equity market increase in value. When the stock market crashes as it did in 2008 and 1929, the party in power is booted out and then spends the next years plotting their come back. The one constant is that the Federal Reserve, Congress and the President all want the stock market to move higher. Historically, we have many years of positive returns, a few years of negative returns and a large disaster occurring once ever generation or two. The rise of the stock market is inevitable because the government's mission is to keep the stock market inflated for political reasons and the federal government has many tools at its command to accomplish it! Remember, Quantitative Easing did not exist until the Federal Reserve decided to create and use it to bolster the US stock market. The problem is that too many people keep watching the stock market and assume that the equity they hold is cash in the bank when it is not. The best time to have purchased equities was March of 2009 but most people could not as they thought the stock market would go lower. As the equity market has risen over the last 6 years, the bargain has decreased but not the overall premise. Politicians lose their office when the market crashes so they will do anything to keep the market up and when it does crash reflate it. Therefore to the extent you can tolerate the ups and downs in the market, it is best to always be invested. And if you stayed out of the market, and want to get back in, now is a good time. Yes, it took about 7 years for the general stock market to surpass the high reached in 2007, but it did surpass it and as long as the US government can manipulate money, equities are the best place to be always. The need for fixed income is for those times when equity either crashes or the reward for buying them is high. Now is not one of those times. Rich Colman
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