Too Far Too Fast? No we are not talking about politics or social media we are talking about the stock market.

Have we gone too far too fast? This seems to be a common investor question. This question concerns the market increase from the lows of March ‘09 to the end of the year which moved up roughly 65%. The 65% increase is not so much irrational exuberance as it is the result of unrealistic gloom from last March. That market was reflecting unreasonable valuations that had many blue chip companies trading below liquidation value. It may feel like to far too fast that way but we shouldn’t invest on our feelings; rather, we invest because we want to accomplish our long term goals of retirement, freedom, and security. In historical context we have not gone too far too fast. We are in the 10th month of a bull market and the S&P 500 index is up 65%. Historically the average bull market has lasted 68 months and has gone up 176%. So rest assured there is still plenty of time to get in. The beginning returns of a bull market typically see the largest increases just moving back to more fair value pricings. If you are waiting for a big pull back to invest, when do you invest? What if the pullback never materializes? The stock market both here and abroad will take breathers now and then but no one knows where and when with exact precision. The best way to ensure participation is to stay invested and the best time to put money in the market is when you have it available. We readily acknowledge there are risks to growth. We are in uncharted territory which puts policy makers in the undesirable position of experimenting. This means there are opportunities for mistakes. But the 14 trillion dollar US economy is just too big to kill even with a variety of policy mistakes. If the economy grows at a conservative rate of 4%, enough health should be provided to the system to start driving down the last part of the recovery which is unemployment. So what is the answer to the question have we gone too far too fast? For politics it depends on which side of the aisle you sit on. For social media it depends on your age For the stock market the answer is no we have not gone too far too fast.

For regulatory purposes, we cannot post or respond to comments or e-mails through this site,This communication is strictly intended for individuals residing in the states of AL,AZ,CA,DE,IL,NC,OK,PA,TX,VA. No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products and services.

Rebecca Kennell is a Registered Representative and Investment Adviser Representative with/and offers Securities and Advisory Services through Commonwealth Financial Network ®, Member FINRA, SIPC, a Registered Investment Adviser. Custom Financial Design is located at 4647 North 32nd Street, Suite B210, Phoenix AZ 85018 (602) 952-5588

Boat loads of cash: The chart below shows U.S. corporate borrowing as a percentage of GDP and cash balance as a percentage of income. Corporate borrowing is at historic lows and cash is at historic highs. Given the stark difference to the frantic reminders of the overleveraged government, banking system and the consumer, one would think we are on two different planets.

The overleveraged story is constantly in the news and due to the fact that bad news makes good copy, the cash rich group is hardly ever mentioned.  The last time corporate borrowing was this low Paula Abdul had a hit in the top ten and the time before that Nat King Cole had a top hit.

Although the government has managed its budget like an out of control shopaholic, U.S. Corporations have done a stellar job of managing their finances with near historic discipline.  American corporations are as flush with cash and as flexible as they have been in nearly 60 years.  One could be a bear on U.S. corporate stocks if that is what you are determined to do but to bet the farm against equities, one would have to conclude that the cash available will not find any better opportunities than the current return on cash (which is below 1%).    One would have to conclude that the same smart managers who accomplished this disciplined amazing horde of cash can’t find anything smart to do with it.

However, if you do believe they are smart enough to find opportunities with this much cash they can do pretty much anything they want.  They can acquire opportunities for cash, buy back their own stock, or raise dividends; they are already practicing the latter two.  To bet against this opportunity seems like a long shot to this Advisor.

For regulatory purposes, we cannot post or respond to comments or e-mails through this site,

This communication is strictly intended for individuals residing in the states of AL,AZ,CA,DE,IL,NC,OK,PA,TX,VA.  No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products and services.

Rebecca Kennell is a Registered Representative and Investment Adviser Representative with/and offers Securities and Advisory Services through Commonwealth Financial Network ®,

Member FINRA, SIPC, a Registered Investment Adviser.  Custom Financial Design is located at 4647 North 32^nd Street, Suite B210, Phoenix AZ 85018 (602) 952-5588