This time last year, in just the first twelve days of January, the U.S. stock market dropped 10%, giving us a prelude to the wild and crazy year we were in for.
This year looks a little different. For one, we begin 2017 near all time highs on each of the major indices, led by the two groups that typically lead markets both up and down the financials and the transports.
Energy and industrials have joined the group, and these Four Horsemen have taken the reigns from last year’s FANG stocks (Facebook, Amazon, Netflix, and Google) to lead this aging bull market into its ninth year.
As we’ve been saying ad nauseam for several years now, the AARP card carrying bull will soon retire, and we will work through another 2000 or 2007 correction. But there’s still no indication it will happen any time soon, and believe us, we’re looking.
Yes, there are some holes in the path. Healthcare, and more specifically biotechs, has not come along for the ride. Technology is languishing at best, and the FANGs have had their teeth pulled. Utilities and real estate, including the home builders, are going nowhere fast. The retailers are as flat as Mariah Carey’s New Year’s Eve performance. And don’t even get us started on gold and silver and the guys who dig them out of the ground. Yikes.
The areas that are working are simply overcoming the rest, pushing the market to record levels. That’s the market in a nutshell, and it’s been that way for a while now.
So unless you have the time and energy to pick individual stocks, your best bet may be to consider an index or a fund in one of the sectors that’s in favor right now. Because for whatever reason, the U.S. is looking up, and appears to want to go higher. And until that stops and we see any signs of this bull starting to wobble, you should also be looking up.