One might think the spirited, anxiety-producing U.S. elections would be causing trepidation in the stock market. However, the broad U.S. stock indexes continue to show strength. Recent investor sentiment data also shows bearish sentiment near its lowest this year.
The Dow Jones Industrial Average and the S&P 500 indexes rose to fresh records on Friday. They have risen for six consecutive weeks, their longest such streaks since December. Technology stocks continue to advance the large-cap indexes. Even small-cap indexes are performing well as interest rates are expected to fall further, lowering many of those companies’ borrowing costs.
While this good news is welcome, remember that markets can act like a pendulum in the short run. Shifts from bullish to bearish sentiment (and vice-versa) often happen when things look rosy or terrible, as the case might be. Some short-term turbulence could happen, especially as we approach Election Day itself.
If turbulence does happen, remember that market volatility is normal. Remember also that markets look ahead more than they look at the present. Patient stock investors are generally rewarded over time. We encourage you to stay confident, and keep your long-term goals in sight.