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Investment Myths Vs. Realities

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Geopolitical events and earnings reports drive long-term investment returns, right? 

Think again. 

Global occurrences like the Cuban Missile Crisis and Iraq War have only resulted in short-term changes for the market, and not the long-term effects that investors might have imagined. (1)  

This is just one of several key factors that don’t play a role in your long-term returns (or as much as one might think). But most investors still overvalue the importance of these political occurrences on long-term returns. So what then?

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Fed Watch & Gathering Clouds?

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Clouds may be gathering. Should investors be worried about a storm?

Let’s look at some factors that could trigger a market selloff in the weeks or months ahead.

(Note: I'm not saying a selloff is definitely going to happen—I want you to be prepared if it does.)

Factor #1: Stocks are trading near record highs

Stocks have posted multiple record closes, and the S&P has been trading well above its 200-day moving average. (1, 2) When stocks repeatedly push new highs, it’s not uncommon to see a pullback as traders take profits.

Factor #2: Investors are watching the Fed like hawks

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Hard or Soft Landing? Watch the Sahm Rule

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Is a zombie recession coming? By that, I mean that renewed fears of a "hard landing" recession have emerged from the grave and are walking among us. Many analysts were convinced that the U.S. economy could achieve a coveted “soft landing,” but they might be overly optimistic.

What makes some economists worry about a recession?