Tis the season to be overly optimistic about the year ahead of us. We reflect upon 2020 and commit (for about a month?) to New Year’s resolutions that will help us participate in what will undoubtedly be a better year than almost any prior. I’m not talking about you and me. I am talking about the U.S. equity market. The MSCI U.S. Index is comprised of 618 companies that represent large and mid-cap companies. It covers approximately 85 percent of U.S. market capitalization. The consensus expectation for aggregate earnings per share of this index is 20 percent for 2021….
Insights & Advice
Looking nifty at fifty
Dalton — Is it time to sell stocks because they’ve gone up so much? No. I don’t think so. Yes, we’re going to get a big correction. But, heck, we’re always going to get a big correction. Roughly three and a half times per year, the stock market corrects 5% from an intermediate-term top; about once every 14 months the stock market corrects more than 10%. Yet for more than a century, the U.S. stock market seems to keep finding new highs. Knowing that a correction is coming, whether it’s 5% or even 15%, doesn’t necessarily mean it makes sense to…