Dalton — The U.S. economy went from stalled out in the first couple months of the year to a rapid recovery in the month of March, with the advanced estimate of U.S. GDP for the first quarter coming in at 3.2 percent last Friday. That’s the best first quarter in four years, and well above the consensus. I’m not going to spend much time on those numbers as they’re now five days old and have been well-covered over those days. However, it’s worth mentioning because, last week, I explained that I was becoming nervous about where the stock market was trading and that a correction was likely. However, I also said to “suck it up” as 1) volatility is the cost of doing business in the stock market; and 2) it won’t be the type of long or large drop in prices that warrant selling equity positions. I’m all for getting more defensive when the time comes, and that’s a big part of my job—trying to figure out when that time has come. This latest GDP reading is just another reason to support my advice of staying the course. We’ve got more time before the next big one comes.
I hope you trust my advice, but I admit that I’ve always been a follower of the “trust but verify” flock. It’s been my experience that if you’re trying to verify information from someone, you shouldn’t also rely on them to present the verification. I mean, you wouldn’t want a detective investigating their own alleged wrongdoings. So I’m going to go ahead and give you a sense of what some other professional investors are saying.