Dow 14,198?

[abcxyz]

Sounds like you need a different investment adviser. At 30, you should be in risker investments. You shouldn't be flat at all right now, even the low risk investments have done very well since the bottom.

 

[Tilted]

The DJIA did manage to close at an all-time high yesterday - 14,254. It's up a little more today, probably in part on better than expected private payrolls data from ADP. The S&P remains a little below its all-time closing high and the Nasdaq is still a long way from its all-time closing high.

 

[Tilted]

My portfolio is not doing that well at least comparatively to what the stock market is doing. I am only 30 so I don't have hundreds of thousands of dollars to play around with but my savings are about 30K. I have about 20K out of that 30K is either global stock funds or commodity funds and the remaining 10K in the U.S. stock market. Its frustrating to watch the stock market shoot ahead while my portfolio flat lines. At the same time, I feel fundamentally the only thing keeping this stock market at its current levels is the cheap money from the federal and depressing interest rates. The market is not that great and I don't trust myself to time my exit at the right time so I am intellectually okay with my situation even though its frustrating.

I wouldn't say that Federal Reserve policies (I assume that's what you're referring to by 'the federal') are the only things keeping equity markets this high, but the markets are quite sensitive to those policies and speculation about them going forward. The Fed has definitely pushed capital toward certain kinds of assets, to include equities.

But earnings have also been strong, equity companies in general are doing well. That's a big part of why equities are at their current levels (though earnings themselves can be affected by Fed policies). That can of course change as we move forward, but current equity prices reflect current (equity) business realities reasonably well.

 

[philibusters]

I wouldn't say that Federal Reserve policies (I assume that's what you're referring to by 'the federal') are the only things keeping equity markets this high, but the markets are quite sensitive to those policies and speculation about them going forward. The Fed has definitely pushed capital toward certain kinds of assets, to include equities.

Fair Enough

But earnings have also been strong, equity companies in general are doing well. That's a big part of why equities are at their current levels (though earnings themselves can be affected by Fed policies). That can of course change as we move forward, but current equity prices reflect current (equity) business realities reasonably well.

I am kind of the school that believes earnings reports (along with political news) mainly just creates volatility on the stock market. The reason is that if you look at a stock index like the S&P500 as a whole over a decade, the earnings growth numbers don't deviate a lot from decade to decade. Sure certain companies do better now than in the past or vice versa but they tend to cancel each other other. Within that decade certain years may have been better for the stock market then other years, but they average out. Over the long term the volatility evens out and the S&P500 over the course of 100 years has growth very similar to its growth in earnings.

I think its harder to time and predict earnings than P/E ratios fall and rises. The first book (and only book) that I have ever read on investing was Ed Easterling's Book "Unexpected Returns: Understanding Secular Stock Market Cycles" but pretty much follow his philosophy. That may be stupid of me because that is the only investing book I have read and its always good to know the other opinions, but I have kind of taken Easterling's philosophy that its better to time P/E ratio swings than to try to analyze earnings or pick individual stocks.

 

[Tilted]

I doubt that it will happen today, but the S&P 500's all-time closing high could be in jeopardy now as well after a much better than expected BLS Employment Report this morning. The S&P 500's all-time closing high is 1,565.15 and it closed at 1,544.26 yesterday. S&P Futures have it opening up about 6 points this morning. I guess we'll have to wait to see if the equity market rally of the last 2 weeks runs out of steam today.