Long-Term Optimism Validation
On a day-by-day, week-by-week, and, obviously, year-by-year basis, there is a lot going on in the markets. Our job as portfolio managers and asset allocators is to follow those things going on and apply needed perspectives and points of action to what we are doing in client portfolios towards the realization of a given outcome (a fancy way of saying, to monitor the markets and adjust portfolio activity as warranted to generate a good return and enable clients to achieve their investing objectives). However, every now and then, our desire to be tactically effective in the short-term and to communicate effectively in the intermediate-term might cause even us to lose sight of the real long-term realities that we care about as investors. And if there is a more powerful expression than this of why we are long-term bulls at The Bahnsen Group, always and forever, I haven’t seen it. Does this chart say anything about what the Fed will do next year, or what will happen to high yield bonds in 2017, or what corporate profits will look like in 2018? Of course not. But in a world where free markets have brought the global poverty rate down 80% in one generation, I recommend staying bullish long term. That optimism is completely rational.