The current economic expansion and equity bull market has arguably been one of the most distrusted in history. As they often do, markets have done their best to surprise investors. With the five-year anniversary of the March 2009 lows recently passed, annualized returns for the S&P 500 have been robust while market volatility has descended toward prior cyclical lows. Consequently, it appears investor mindsets have gradually been transitioning from conservatism and cautiousness toward a “fear of missing out.”

The level of skepticism around this expansion has certainly been reasonable in many respects. The overall pace of growth has been sub-par, income inequality is surging, debt levels remain elevated, wage growth has lagged, entitlement program reform is much needed, and savings rates still remain historically low. Policy uncertainty has only added fuel to the fire. Despite these real issues, the U.S. economy has made progress on a number of fronts including the shale energy revolution, comeback of the manufacturing sector, rapidly improving budget situation, technology-driven innovation, a recovery in the auto and housing markets, and deleveraging in the household and financial sectors.

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