Stock Market Performance

Since 2009, the stock market has had quite a run! Per the chart in today’s Wall Street Journal, the value has more than doubled since the recession low.

WSJ 2-27-2017

The question of course is whether it has gone too far too fast!

Has it just caught up to where it would have been if it had not lost so much value back in 2008? If so, it may be reasonable to expect continued good news.

The alternative is that it has  once again gotten ahead of itself and is to expensive – setting us up for another decline of whatever magnitude.

Obviously I don’t know for sure. For the most part, other than its longevity and height, it doesn’t seem like it is too far ahead of itself.

The key to extending its positive performance will be increasing productivity and corporate profitability. The answer to this will not only be up to the companies themselves, but the Trump administration’s policy initiatives. It appears that some of these are likely to be positive for business while others may turn out to be not  so beneficial.

Bottomline, I’m not particularly concerned about the future for the overall stock market. On the other hand, I may not be overly optimistic that its performance for the next seven years will be an exact duplicate of recent history. Therefore it is probably reasonable to be at least modestly skeptical, but no particular reason to be overtly pessimistic.