This is a great time in stock market history to remind ourselves of an old Wall Street saying: One month does not a trend make.

Today's (March 9, 2018) Government non-farm payroll report was the complete opposite of last month; a breathtakingly stunning report that quelled investors' fear that the FED would slam on the brakes. 313,000 jobs were added to payrolls while wage growth came in lower than expected. Even more impressive is that over 800,000 people reentered the labor force, convincing investors that the labor market still has plenty of slack before employers have to jack up wages to attract more workers. This set of conditions, economic growth with low inflation, is called "Goldilocks economy"; an economy that is not too hot to overheat, not to cool go into a recession, but just right for stocks.

So, let me ask you an important question. Which of the two payroll figures do you go by? I have my answer, but believe me, this is the existential question for investors today. I mean, how could we get such opposite reactions to payroll figures in just one month? Did things really change that quickly? Or maybe economic statistics are uneven and we need to get used to the stock market's split personality? Remember, one month does not a trend make. The last month is one heck of a reminder.

And now here's my answer to the above question about which payroll figure I am going by. It's both. I know, that's a very basic and safe answer. You see, in my business, there are the product-centric salespeople who come off as advisors and there are the advisors who are client-centric and who do not come off as salespeople. The former count on the near term performance of their recommended products to determine if you are moving closer or further from your goals. The latter is product agnostic, believes all financial products are merely tools, and goes by clients' risk tolerance, goals and time horizon. An advisor educates his or her clients about what could happen in the investment world and how their advice and portfolio are expected to get clients through volatile times. An advisor doesn't use fear-based and greed-based sales tactics and certainly won't come off as an expert in everything, but will definitely know your situation well enough to bring you to knowledgeable experts to help you fill in any blanks in your long term plans. I bring this up because if you are the client of an advisor, not an advisor/salesperson, then you didn't need to change your entire investment portfolio from one month to the next. It's more like you know that you have a workable, flexible, diversified, long term strategy that provides you the kind of understanding that allows you to stay invested for the long term.

From my perspective and that of my clients, this is what the last two payroll reports mean to us. Nothing more, nothing less. 

   

 

And now, check this out:

It was a privilege to write this for CNBC, March 2, 2018

 

 

Here's the most alarming market message: So-called safe havens aren't so safe        

-When it comes to stocks - any and all stocks - and bonds with a time to maturity greater than a year, there are no true safe-havens. They don't exist.

-I've seen this movie before. When interest rates rise, it's always the same group of conservative investors who were overreaching for yield who wind up getting burned.

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