A couple of my favorite pastimes are following world events and the financial market. And, often the two are intertwined. Usually when there are significant adverse political developments, the market falls because of greater uncertainties and risks.
Given the backdrop of increasing geopolitical tensions, the approaching end of Fed’s Quantitative Easing in October, and the S&P 500 bumping along at almost 2000, I am surprised that the market has remained as resilient as it has over the past few months. Moreover, this past Sunday, The Wall Street Journal article “For S&P 500, Strategists’ Forecasts Fall Short” (subscription required) suggests that many strategists believe that the majority of this year’s gains have been realized.
With the market’s resilience so far, I would not be surprised by a pullback. And because we are approaching the end of the earnings season, with many investors and traders away on vacation, I do not expect stocks to go much higher in the absence of positive news. Thus, my investments remain much the same as they were before because I expect a dull and boring August.