August was a month in which the market seemed to take a little rest. The Dow and the S&P 500 were barely up over month end July, while the NASDAQ was up 1.28% and the Russell 2000 lost a little ground. All-in-all, nothing to write home about (though you may want to forward this newsletter). Second quarter GDP numbers continue to be revised up and will probably show an annual increase of 3%, which will be good. However, with the other three quarters (third and fourth quarters yet to be determined), the consensus is the annual GDP will likely come in at just over 2% for the year. That is, if nothing ground breaking happens, like a massive stock market crash or war with North Korea.
Speaking of a stock market crash, you’ve heard me mention how conservative we are being right now. I expect we will remain very conservative. One reason is because of how old this bull market is. I’ve talked about this being the second-longest bull in history, but these are the numbers. The longest ever bull market lasted for 3452 calendar days, from October 11th, 1990 to March 24th, 2000. The current bull market started on March 9th, 2009, and on August 31st it had lasted 3097 calendar days. If the bull market goes on until August 22nd, 2018, it will be the longest in history. That’s less than a year from now. So I ask this question with all sincerity, do you think the next BIG move in the market is going to be to the up side, or the down side? Well, we don’t know, either. But history and statistics tell us that caution is called for at this time. So we are being cautious.