Our World Has Changed

“Crisis does not create character; it reveals it.” – Jim Stovall, Wisdom for Winners

In just a few short months, our world has changed. 

Even the word “pandemic” is scary.  Health officials have labeled the coronavirus as “novel,” because the human species has never been exposed to it.  We seemingly have no natural antibodies. As the news of the virus has unfolded, and nations and communities accepted that our first (and possibly only) line of defense was the concept of “social distancing,” I gained a newfound respect for survivors of previous pandemics. The Bubonic Plague. The Spanish Flu.  Or even 1612 when Native Americans welcomed the Pilgrim settlers traveling from Europe bringing with them smiles, smallpox, and leptospirosis[2]

Surrendering Before the Battle Begins

“In any sort of contest – financial, mental or physical – it’s an enormous advantage to have opponents who have been taught that it’s useless to even try”  – Warren Buffet

Spring has arrived, and 2017 has continued with the positive sentiment that closed 2016.  U.S. stocks have done very well with the S&P 500 index up over 6% year-to-date.  This positive movement is largely the result of continued expectations that the new President will implement business-friendly tax and trade policies that will further boost corporate earnings.

In the December quarter, 65% of companies in the S&P 500 beat their earnings targets and had an average earnings growth rate of 4.9%[1].  This is the first time the index has seen a year-over-year growth in earnings for two consecutive quarters since March 2015.  More good news is expected in the coming quarters, but investors are now increasingly beginning to wonder if the stock market is “overvalued” and “are we due” for a correction or crash?