NEARING LEVELS LAST SEEN IN 1983
Over the past two years the markets have been flashing numerous "be open to better than expected outcomes in the years ahead" signals, including the outside year that was covered in December 2016. Fast forward to the present day and we find another "keep an open mind" figure. The NFIB Small Business Optimism Index rose 3 points in May to 107.8, which is the second highest level over the 45-year history of the survey, and just under the record level hit in July 1983 (source: MarketWatch).
As shown in the chart of the S&P 500 below, after seeing small business optimism reach a level similar to present day levels, the stock market rallied an additional 840% over the next seventeen years.
The chart above reminds us of how powerful the miracle of compounding can be for investors during a secular bull market.
MORE KEEP AN OPEN MIND CHARTS
Since many present day market participants have lived through two 50%-plus declines in the stock market, it is easy to understand why many are skeptical stocks could rise for several more years. This week's video covers numerous factual and present-day setups that may change your perception of how markets operate in the real world.
BUT TODAY IS NOT LIKE 1983
All periods in market history are unique, including 1983 and 2018. The purpose here is not to say 2018 is just like any year, but rather to highlight similarities that can help us keep an open mind about better than expected outcomes in the weeks, months, and years ahead.