I’m not complaining, really. June was the Fund’s best month of the year. I’d prefer a bull market to a bear and there is not doubt we are in the mother of the all time greatest bull market. Just look at the chart below and you’ll see. But this is an unusual bull market by all standards. According to Investopedia, “Bull markets are characterized by optimism, investor confidence and expectations that strong results will continue. It’s difficult to predict consistently when the trends in the market will change.” This bull market is not characterized by optimism. In fact almost the opposite. The bull is almost entirely propelled by the Fed’s easy money policy. There is no alternative when you get nothing for your money with less risky assets. In effect the stock market is the only game in town. That’s not the best reason to invest though.
Zero interest rates have done a great job of lifting asset values. In fact such a great job, I wonder why we haven’t always had zero interest rates. It’s working so well. What brings the bull to a close is anyone’s guess but this chart leads me to believe that when the trend changes, the damage will be staggering. This has been the biggest bull market in history and when the party’s over, it will not be pleasant.
