There seem to be powerful forces supporting market valuations and driving them back up when they drop. I suspect that low interest rates are a big part of that; there simply is no alternative to stocks for many investment needs. A flight to safety in U.S. assets is probably another big part. Continued economic growth, and employment growth, is another reason. Continued central bank stimulus is another. Continued low oil prices are another.
For all the reasons the economy, or the market, could crack, there are just as many suggesting that isn’t likely, at least in the short term. The big picture is telling us that the market understands this and is reacting accordingly.
Despite all of the items on the worry list, it pays to keep an eye on the positives as well. The market is usually a pretty good indicator of how those net out. For the moment at least, it’s not flashing the panic signal. Keep that in mind as you read the papers.
Brad McMillan is the chief investment officer at Commonwealth Financial Network, the nation’s largest privately held independent broker/dealer-RIA. He is the primary spokesperson for Commonwealth’s investment divisions. This post originally appeared on The Independent Market Observer, a daily blog authored by McMillan.