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Is the Market Too High?

data as of August 16, 2021

It’s Christmas time in 1999 and the S&P 500 stands at 1,458.  The previous decade has been one for the record books and there is clamor that the stock market can’t possibly go higher.  Maybe they’re right.  A decade before the S&P found itself in the 300’s and now it sits at 1,458.  We’re not even sure if digital clocks will work in a week as we sit there on Christmas Day.  Can any of these computers that run off of time with the format of 19something even make the switch to 2000?  You have an advantage though and that advantage is a time machine.  It allows you to see what is about to come down the pike for the next 20 years. 

You see we’ll have a contested presidency in the year ahead.  You’ll know that terrorists will fly planes into buildings here on American soil a year later, prompting us to send troops to Afghanistan the year after that.  You’ll know those troops won’t return home for almost 20 years.  You’ll see Hurricane Katrina ravage the Gulf Coast and shine a spot light on the older infrastructure that is America.  In 2007 when illegal immigration tops 11 million for the first time you will not be surprised and you’ll know we’re headed into the worst economy since the Great Depression later in 2008 when the housing bubble bursts.  Just as we’re climbing our way out of that two-year crisis the Deepwater Horizon explosion will occur spilling oil all over the Gulf. 

A tough decade without a doubt, so let’s fight about legalizing marijuana to start the next one.  We’ll spend 2011 doing just that in Colorado and Washington.  September 11th again, this time in 2012, U.S. Ambassador Chris Stevens and three other Americans will die in the attack on the U.S. consulate in Benghazi.  Marathon running won’t even be safe from hatred in 2013 as #BostonStrong trends highly on Twitter.  I forgot…you’re in 1999…Twitter is social media.  On your phone in 2013 you’ll be able to type what you’re doing in 120 characters or less.  Some of it will cause chaos around the world.  Some of it will be mind numbingly stupid.  But it will exist.  Even the Pope will sign on to social media apps like Twitter by 2013.  Epidemic will find its way into our vernacular in 2014 as Ebola threatens to spread across the globe.  It will be short lived and contained compared to what is to come. 

Finally, a bright spot in 2015 emerges pointing to progress.  American vehicle fatalities are way down.  You’re as likely to die in a motor vehicle accident in 2015 as you are from a gun.  Wait, there’s that many gun deaths in America?  2016 will bring about change.  Britain will vote to leave the EU, Brazil and South Korea will impeach presidents and the U.S. will vote Donald Trump into the White House.  We’ve had a little bit of everything from where you sit in 1999 through 2017.  With the constant noise and bickering it seems like we’ve agreed on very little of it but it 2017 we can all agree that the total solar eclipse we’ll experience will be pretty cool.  Agreement won’t last long as we’ll go back to fighting in 2018.  This time the bickering will be between the two largest economies of the world, China and the U.S.  You think you’ve seen technology in 1999 but here in 2019 it will be so big that the U.S. government will hold hearings as to whether or not technology companies violate antitrust laws. 

You’ve made it.  It’s 2020 and your time machine has survived its way through a grueling two-decade disastrous run.  Certainly, they were right that the S&P was too high at 1,458 right?  You pick up the Wall Street Journal and it says the S&P is 3,234 on January 3rd 2020.  That can’t be right, can it?

After a global pandemic in 2020, millions of jobs lost, trillions in dollars spent and an S&P now 1,000 points higher at 4,400 you’ll again be faced with the question:  Is the market too high? 

DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.

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