Stock market's 40th record high raises concerns

Posted on 5 October 2017 at 5:23am

COLUMBIA - Financial markets hit their 40th all time high Wednesday causing investors to question the safety of their investments.

A report released by JP Morgan on Monday showed a 272 percent increase since March of 2009. That’s a larger increase than all other increases combined in the last 20 years.

A financial advisor at Stifel Nicolaus in Saint Louis with more than 30 years of experience said the increase has been steady.

He said, “The market has made a bunch of new highs because it’s been grinding higher, it’s not skyrocketing.”

To explain the growth, he referred to an old saying, “We typically take the stairs up but we take the elevator down.” 

But he said the bottom line is, you will never know when it’s coming, you will never see it until it happens.

The JP Morgan report shows unemployment rates are low at 4.4% and inflation is low at 1.9% compared to its 50 year averages of 4.1%. But the US is experiencing challenges socially and economically, global risks with threats from North Korea and uncertainties with Russia and China that could affect the US economy.

Looking at past economic expansions in the 90s and early 2000s, University of Missouri Economic Professor George Chikhladze refers to the outside threats.

“Either something is happening very dramatic in US politics or something is happening very dramatic oversees." He said, "Let’s say the conflict with North Korea, or if something happened in Europe, or conflict with Russia... Those kinds of strong external shocks could actually throw the economy.” 

Chikhladze said, “If you’re trying to invest for the long-term, you just keep the money in there and let it grow and it will grow over the long-term. There might be some short-run fluctuations, you might lose some money in the short-run, but in the long-run, it will grow.”

Because all investors' goals, net worth, risk and other miscellaneous factors are different, Stiefel’s advisor said there is no "one-size-fits-all" advice.

“The best thing people can do right now is consult with your financial advisor and make sure that your portfolio, your investments match your long-term goals and your investment risk tolerance,” he said.