Time Frames

Here's a view of the S&P 500 since it's lows back in December:

If you'd been held in isolation for a couple of months and this was the only chart anybody showed you of the stock market you'd have to say that we've been in the midst of one heck of a rally.  From the Christmas Eve lows the S&P 500 is up almost 19%.  It's up even more than that as the market has rallied at the open this morning.

Now if you stepped this back a bit and went out to September-October time frame then the picture isn't quite so hot.  

In the chart above we see the S&P showing that 20% plunge into the fall and then its subsequent rally.  When viewed in that context the market is down over 4% since its most recent highs although dividends would spruce up that return by maybe 1/2 of a percent.

Pulled back even further to the beginning of 2018 you have this chart:

Viewed in this context we see a market firmly ensconced in a trading range and up about 4% before dividends since then.

Of course if we continued to show charts we could put up a chart of the S&P 500 from the November 16 elections which shows stocks up 34% without dividends or a chart from the lows in 2009 that would show the fantastic returns of this bull market.  It's all about time frames at the end of the day.  Longer term stocks tell a fantastic story.  The short term is more muddled.  Investors need to keep a long term reference.  Over time the markets have historically followed the economy higher and probability suggests they will continue to do so in the future.

Chart is from Tradingview.com although the annotations are mine.  You can double-click on the charts to make them larger.  

Back Wednesday.

*Long ETFs related to the S&P 500 in both client and personal accounts.  Please note that positons can change at anytime without notice.