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Market Review July 2014

Summary: Recently, popular equity indices have been hitting all time new highs. We point out that this is nothing new: stock markets spend more time in record territory than otherwise and we advise investors to expect a lot more in years to come.

Details: After a few years of getting over the pain inflicted by the recession of 2008, the equity markets are once again registering new record highs. We make the observation “what else is new”. For one thing, we had been writing about better times to come over the last several years and advising investors to invest in anticipation of higher highs.

Markets spend more time hitting highs than is commonly realized. For the benefit of readers, we reproduce our favorite chart of the long run returns provided by the stock market and remind people that even $1 invested in the US stock market in 1926 would be worth $4,700 dollars now and that this path is full of higher highs.

What we are doing with our own money and our advice: We remain positive and fully expect the stock market to continue to be significantly higher over the years, remain fully invested and advise investors to do the same. As usual, we emphasise well-run companies such as those Tralucent buys for itself and its clients.

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