stock market

This month marks the ten-year anniversary of the climax of the 2008 financial crisis. That September, falling asset prices led to the bankruptcy of the investment bank Lehman Brothers. The collapse started a domino effect which nearly brought down the entire global financial system. Both the US economy and stock market bottomed out in the following months at different points in 2009.

It’s official, we’re currently amidst the longest bull market in US history (as measured by the S&P500 at least).  According to data from JP Morgan, the average S&P500 bull market since the 1920s has lasted about 55 months. The current rally is now in its 113^th month and just passed the previous record which ran from October 1990 to March of 2000.

The 2017 Berkshire Hathaway annual report is out. It is always highly anticipated as it contains Warren Buffett’s annual letter to shareholders which usually is packed with nuggets of investing wisdom.

With US stocks off over 10% (as measured by the S&P500[1]) from their all-time highs reached in May, perhaps you’re wondering how the big-dogs are doing.  You may be surprised.   

After a remarkable run, the stock market has finally experienced some negative volatility. The last time we experienced anything like the past few weeks was in 2011. As you may recall, late that summer, one of the big ratings agencies downgraded the credit of the United States as politicians in Washington wrangled over raising the nation’s borrowing limit.

One of the lessons I’ve learned over the years is that a critical part of my job is setting expectations. Since late 2012, US stocks have really marched steadily upward with no major pull-backs. This type of market environment tends to create a false sense of security.

It is utterly amazing how little volatility we’ve witnessed in the stock market over the past six months. The world seems to be a more dangerous and unstable place every month. Think about the big geopolitical events happening right now: