Larry Fink, CEO of BlackRock, the world’s largest money manager, was quoted in a recent CNBC interview as saying: “I am incredibly bullish on the markets.” And, according to a survey from the American Association of Individual Investors, 57% of investors hold a bullish outlook for stocks over the next six months.
The two mostly closely monitored stock-market bellwether indices in the world, the Dow Jones Industrial Average and Standard & Poor’s 500, are making fresh all-time highs, despite bouts of profit-taking. We have discussed in depth the reasons underpinning the current market rally in previous pieces. Just last week, we touched on the subject in an article entitled “Only a fool would call a market top”. In it, we highlighted that historically (going all the way back to 1930), empirical evidence indicates that stocks, in general, have without fail recovered from every downturn to trend higher over time. In other words, investors should always maintain a fully invested, diversified portfolio with a long-term investment horizon instead of trying to time the market.
Notably, prevailing market narratives show that more and more analysts and investors are rounding to the bull side of the bull-or-bear market debate — underscoring optimism for stocks in the short to medium term, despite acknowledging elevated risks. A case in point is that even as investors continue to rotate from tech to reopening stocks, growth to value, cyclicals to defensives, and back, stocks are all moving higher in lockstep. This improving market breadth is a positive signal for the underlying market resilience.
