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Smoke & Mirrors? Thumbnail

Smoke & Mirrors?

Mike Earl, CFP®, CPWA®


Why is the US stock market trading near all-time highs?

That’s a question some of our clients are asking right now – and many more are thinking about it without vocalizing it. With the ongoing effects of COVID-19 being felt all around us, it’s natural to be skeptical of stocks going up.

We don’t need to re-hash the reasons to be nervous about stocks or the world at-large (because you already know them). But the good news (or green shoots) don’t always reach us.

A significant part of our role for clients is helping them stay invested.

And, part of staying invested is focusing on the positive – those green shoots. So, are there any legitimate reasons for why the stock market trades where it does today? We think there are.

Start with interest rates.

When a high-quality bond pays you a scant 1.25% interest rate per year, it just makes stocks that much more attractive.

Recall that in 1999 (a major market top), the 10-year US Treasury bond yielded a whopping 6.3%. How nice does that sound right now?

Even if investors wanted to exit the stock market, bonds aren’t exactly a siren’s song right now.

Moving away from interest rates, there are some encouraging developments in the US labor market.

There are 6.6 million job openings in America right now, which is 1.4% higher than the number of job openings one year ago (pre-COVID). While there is still much work to be done in reducing the number of unemployed persons, it’s encouraging to see the large number of jobs open.

Additionally, payroll tax receipts are at all-time highs (a good sign):

And one-third of small businesses have job openings (blue line below):

While we don’t know (and can’t control) where the market will head next, we do know what our clients’ goals are. We’re here to make sure each one of our client families is on track to accomplish their goals with their money.

The next bear market will come – sooner or later. Will it be in 2021 or 2024? I don’t know the answer to that question, but I do know that the next bear market doesn’t have to derail your life goals and financial goals – when we are working together to build a personalized, prudent, disciplined, and long-term focused plan for your family.



  1. “Help Wanted” by Ed Yardeni: http://blog.yardeni.com/2021/02/help-wanted.html
  2. “Job Openings Pick Up in Pandemic-Resilient Industries”: https://www.wsj.com/articles/job-openings-pick-up-in-pandemic-resilient-industries-11612866601

Because The Wealth Group, Austin B. Colby & Associates is independent of Raymond James, the expressed written opinions above are our own and not necessarily reflective of Raymond James’ opinions.