The Stock Market Runs on Optimism

March 26, 2022 | by V. Henry Astarjian | Posted in Blog

Optimism is the fuel that drives the stock market decade after decade. It is a sense among long-term investors that the future will be brighter than the past. It comes from the belief and the knowledge, that over time, our American economy and our American companies grow and prosper, as indeed they have since the founding of the nation 246 years ago.

There have been economic ups and downs in the U.S., manias and depressions, and political turmoil too, but over time a healthy underlying optimism about the great economic value that Americans produce has propelled the stock market ever higher. It comes from a sense that America has always been, and still is a special place where innovation is valued.

Looking at the period from 1929 to now, we know with certainty that about 2/3 of the time, stocks move up. During the other 1/3 they either move sideways or down, offering opportunities to buy low with the hope of selling higher.

I offer this as perspective during a time when a recession in the economy and a bear market in stocks is increasingly likely.

As Warren Buffet once said, “Despite some severe interruptions, our country’s economic progress has been breathtaking. Our unwavering conclusion: Never bet against America,” 

Disclosures: Waterstone Advisors, LLC is a Massachusetts registered investment advisor. Registration with securities authorities does not imply a certain level of skill or training. Investing carries risk of loss, including loss of principal. The information and data presented in this note have been compiled from publicly available sources that are believed to be reliable. However, their accuracy is not guaranteed. Waterstone Advisors LLC does not guarantee the performance of the securities or strategies discussed or analyzed in this note. An investment in these securities or strategies may result in complete loss of principal. For additional information and disclosures, please see our ADV Part 2 (the “Firm Brochure”) in the Our Approach page of our website at  www.waterstoneadvisorsllc.com , or contact us at 978-828-2188.