Mardi Gras celebrations came to an end this week in many parts of the world, perhaps most famously on Bourbon Street in the French Quarter of New Orleans. Mardi Gras, which is French for “Fat Tuesday,” is a traditional last hurrah for revelers before they assume the religious obligations of Lent. After days of parades, libations and rich food, observers gear up for a period of sacrifice and sobriety. Another year from now, they will do it all again.
Religious and other traditions, such as the State of the Union address by U.S. presidents, help keep people and cultures connected across time and place. The natural rhythms reflected in these traditions are a reminder that all people—investors included—experience both good times and bad.
For investors, the past few months have been very good. The Dow is approaching its all time high again, jobless claims are near a five-year low, and economists are starting to vocalize their belief in the underlying fundamentals of the market’s recovery. Of course, that doesn’t mean market volatility is a thing of the past. Like all investors that have come before us, we can expect to experience a wide range of market cycles, including the good, the bad and the occasionally ugly. The important thing is to stay focused on the reasons you invest in the first place. Keeping those reasons in sight will make it easier to stick to your goals when volatility returns.
The Grammy Awards are this weekend, and the Black Keys, Kelly Clarkson, Frank Ocean, Taylor Swift and other luminaries will be competing for Record of the Year. If there were a category for Best Performance by an Asset Class, global stock markets would take the prize. European equities have continued their impressive six-month run, and recently they’ve been joined by Japan’s long-dormant stock market. In the U.S., the Dow Jones Industrials Average closed over 14,000 last week for the first time since 2007.
Just like music fans, it’s easy for investors to get caught up in the media hype. But instead of tripping over yourself to get a closer glimpse of the red carpet, it might be a better idea to step back and take a deep breath. If you’re following a well-designed investment strategy, you should already have an appropriate allocation to the stock market.
At SEI, we believe economic fundamentals justify most of the optimism reflected in stock prices, and additional equity exposure might not be a bad idea. But we are taking a patient approach, as certain measures of stock-market sentiment indicate that the optimism could be a little overdone at the moment.
How much thought have you given to what you want out of life?
At Goal Investor, we believe the best investment strategy starts with a clear understanding of exactly why you’re investing. So it’s worthwhile to spend some time thinking about the big goals in your life.
Is a pretty house in the ‘burbs with a white picket fence and a couple of kids your dream? Are you longing to ditch the 9-to-5 routine and do something adventurous? Is there a special cause or passion you’re hoping to pursue?
Whatever your goals are, our mission is to help you put your money to work so you can achieve them.
So tell us: what is your biggest life goal? Print and complete the form below. Then write in your life goal, take a photo, and share it with us at www.Facebook.com/goalinvestor.
The first step toward achieving a goal is putting it into words. Let us help you get started.
Some of our Goal Investor team members have been sharing their life goals.
“To be self-employed while exploring the world.”
“To buy a mango farm on the oceanfront in Costa Rica.”
The Super Bowl and Beyonce’s live rendition of the Star Spangled Banner have been getting a lot of media attention. But the Dow Jones Industrials average has had an exciting week too—it just reported its best January in almost 20 years and finished within one percentage point of its all-time high. Equity funds saw their largest monthly inflows since 2000.
Economic data remains a mixed bag though. Initial claims for unemployment benefits surged in late January after falling to a multi-year low earlier in the month. And the government estimated that the U.S. economy actually shrank slightly in the fourth quarter. So, you may be asking yourself, “Is this a good time to invest in the stock market?”
The answer, of course, is that it depends. If stocks are an appropriate part of your overall investment strategy—and for most people they are—then you should always have a targeted allocation to the stock market. It’s also important to rebalance your portfolio regularly.