A Strategic Update, With Stocks Near All-Time High And Crises Unfolding

Published Friday, January 12, 2024 at: 10:23 PM EST

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Stock prices, as measured by the Standard & Poor’s 500 index, closed a fraction lower than their all-time-record high of January 3, 2022, and are not cheap by historical price/earnings valuations.

With Houthi rebels threatening the U.S., deep domestic political derision, and economic uncertainty clouding the outlook, what’s an investor to do?

The 27 crises since 1957 highlighted in this chart are useful to recall at this moment. Crises came and went for the past 57 years. Will that suddenly change? It’s possible. However, stock prices have been a function of corporate earnings growth here in the United States — regardless of world events.

Crises are not going to stop happening. When the next crisis comes, when the next correction or bear market strikes, try to remember that and to stick with your long-term commitment to investing in a diversified portfolio. A strategic plan for maintaining your commitment to stock investing is important to helping you remain psychologically able to withstand stock market corrections and bear market drops.

We are reminding you of this investment lesson based on history as the market seems on the verge of breaking its all-time high-price record set two years ago. We are urging you to also consider tax- and retirement-income planning maneuvers that can increase chances for financial success.

The Standard & Poor’s 500 stock index closed Friday at 4783.83, up +0.08% from Thursday, and +1.84% higher than a week ago. The index is up +113.81% from the March 23, 2020 bear market low, and -0.27% lower than its January 3, 2022, all-time high.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market-value weighted index with each stock's weight proportionate to its market value. Index returns do not include fees or expenses. Investing involves risk, including the loss of principal, and past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.

Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances. The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions. This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.

This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.