I am back from a month’s vacation in Europe, first with my wife of now 30 years celebrating our anniversary, and then with a group of friends attending the British Open golf tournament in Northern Ireland and subsequently golfing on the Emerald Isle. What a great trip! Only a couple of days of rain, and we managed to avoid the worst of the European heatwave. Thank you to my wife and to everyone who helped to make this trip of a lifetime happen without a snag!
Perspective
I haven’t really gotten away from it all in a long time. Seems like my previous recent trips have involved me keeping fully abreast of the news of the day and the financial markets. This trip was different. I really didn’t pay much attention to the day-to-day news, and though I checked the markets every day, it was to see if there were any significant moves one way or another. Being away and out of touch (sort of) helps you to realize that the day-to-day news typically doesn’t have much effect on the direction of the financial markets, particularly the stock market. I believe that some traders get so invested in the news of the day that they fail to see the forest for the trees. The “forest” purview is that the US economy continues to grow; corporate earnings remain strong; some companies (Amazon) are taking market share away from others (other retailers, especially small retailers); and interest rates remain low. All of this is bullish for stocks in general, particularly for those of us who invest in index ETF’s.
Fortunate
At the same time, I was fortunate to have been away during a month of minimal volatility. When I left on my trip, the SPY was at about 295, and it is now at about 300, with few peaks and valleys between then and now. Similar story for the Nasdaq 100. The Average True Range (a measure of volatility) has been small. The VIX Index (another measure of volatility) has declined by about 6%. In short, it has been a good time to have been away from the financial markets. The markets have continued their “melt-up” despite continued fireworks in Washington, D.C. By the way: Missing the daily news from Washington was really great! By getting away, one can see how the 24-hour news cycle feeds the beast, and that it takes on a life of its own that has little or no bearing on how most of the population live their lives.
IMO
I hope I have gained a perspective that I can continue to carry now that I am back in the breach. I have always tried to be above the fray, so to speak, and I hope that this break moves me more in that direction. Please contact me directly if you want to learn more about my trip, or if you want perhaps to share a story about what you have learned through previous trips of your own.