The worst question of them all

It’s summer, or at least it was recently until our oldest went back to preschool.   Summer means family gatherings and kid’s birthday parties and BBQs and a pretty jammed social calendar for us. I try pretty hard to avoid the “professional” talk at social events, but I’m never 100% successful.  Inevitably, somebody asks the question. I really hate the question.  You know the question.

“So what do you think of the market right now?”

This is the part where I try really hard not to let out an exasperated sigh and shrug my shoulders. But first I’ll break down what drives me nuts.

“So what do you think of the market right now?”

Look, I get it. You think I’m “in the market” and that I sit at a Bloomberg terminal and have CNBC and Bloomberg and Fox Business on for 12 hours a day. You think I care about sectors and earnings reports and the latest Uber funding valuation. The reality is there’s a 50/50 chance I don’t even know if the market is up or down on any given day, because I have actual work to do. Sure, I at one time had a bunch of regulatory licenses and now I run an investment advisory firm and have a CFP certification and help people make good decisions about their portfolios over time, but I’m just an advisor. I barely know what spoos are and couldn’t care less about the advance/decline line and the 200 day moving average.

“So what do you think of the market right now?”

What do I think? Like, you want me to guess at something? I don’t sit and ponder the existence of the capital markets most days. Or do you want me to just respond with a really smart sounding answer about when the market expects the Fed to raise rates and historically what that has meant for small cap stocks, or how a certain sector is “leading” right now and that should mean X because of very logical sounding reason Y. I could go on about this economic recovery compared to other recoveries and have a good bear case about how it’s gone on much longer than “normal” or have a good bull case about how things are really now just getting good because of housing starts picking up and labor market tightening leading to higher middle class wages. I could do those things. Is that what you want?

So what do you think of the market right now?”

I think what you’re really asking is “what is going to happen next?” because let’s be honest, that is what everyone would like to know. But the truth is I don’t think there is a “right now” in the markets.  There is what we know happened yesterday, last week, last month and last year, and what might happen tomorrow, next week, next month and next year. “Right now” doesn’t really exist. I could say simple things like “right now” US stocks are more expensive than international stocks and real bond yields are fairly low (but not unprecedentedly low) and bond credit spreads are fairly tight and on and on but what does that really tell you? It’s interesting information I’m sure but it absolutely does not tell you what comes next, which is what you’re really asking.

So ask me the question this summer and at Halloween and at your ugly Christmas sweater party and next summer at the barbecue and you’re going to get the same answer from me.

“I don’t know, and neither does anyone else. If they say they do, they are lying to either you or themselves. Focus on things in your control like your behavior and your costs and taxes and let’s go get another beer/cider/eggnog.”

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