Why Trump, Hillary Will Not Take Down the Market

In this election cycle, will investors be winners or losers? Let’s just get this out of the way: the bulk of this year will be consumed by election noise. There is no way around that. That noise, in turn, will drive out other stories, unless there is a major disruptive event (a terrorist attack, such as the recent one in Brussels, a natural disaster, unexpected political upheaval in the world, or expectations of a possible Brexit coming to fruition). That noise also will subtly influence investors’ behavior, or at least how they view the world. There is no way to avoid that.

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An Economy of Chicken Littles

The “nattering nabobs of negativism” (a phrase we have to thank Spiro Agnew for, via William Safire) are out in full force again in the financial and pundit world. While there was only occasional mention of the economy during the Republican debate last week, both the GOP contenders and market mavens seem to agree that the world is going to hell. They have different reasons: The Republicans think the world has become dangerously unstable and that Obama is a cause. Investors, who have pushed global financial markets sharply lower (the S&P 500 is now down almost 10 percent since January 1) to the worst start to a year ever, see the root cause as heedless central banks, a U.S. economy grinding to a halt, and a collapsing debt-laden China.

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The Virtues of This Boring U.S. Stock Market

So here we are, more than halfway through the year, and although there has been no dearth of daily news, it’s been remarkably static for many investments, particularly U.S. equities. Some sectors — energy and commodities above all — have been spectacularly weak as the global economy continues to adjust to massive supply and demand shifts, especially lower demand from China. A few sectors, notably technology, have done quite well, with several technology indexes up close to 10% year-to-date. But in aggregate, U.S equities have had one of their least volatile and least interesting six month periods in a very long while.

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What Should Investors Expect in 2015?

‘Tis the season for looks back and looks forward. The financial world will be replete with such missives in the weeks to come, and that is actually all for the best. Given the fluid nature of money and planning and investing, regular assessments of what worked and what didn’t, how the year played out versus expectations, and what might lie just ahead, are vital. While it is true that forecasts about the future usually say more about present sentiment, thinking ahead does provide a framework for assessing likely risks and potential opportunities.

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Don’t Fight Powerful Stock-Market Trends

Unless you have been living under a proverbial rock for the past few weeks (though unlikely if you are reading this), you know that the midterm elections in the United States saw a Republican sweep, with enough senatorial seats gained to take control of the Senate, more seats added to their majority in the House, and a few extra governorships picked up along the way.

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In Looking at Stocks, Valuation Is Overvalued

Barely a day goes by of late without someone in the financial media announcing that equities are overvalued and primed for a fall. The most popular article on one of the most popular financial websites recently blared "U.S. stocks will be very disappointing for 10 years." The argument? That on multiple gauges, the current valuation of the market is higher than it was during the vast majority of market peaks in the past.

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