Markets go up and markets go down, so maybe it’s not surprising that January’s stock market performance has less exuberance to it than the performance to which we’ve become accustomed.
As of yesterday’s market close, the S&P 500 was down 0.13% year to date, which is not a big deal, especially considering that the S&P 500 Index finished 2013 up 32.4%. Even with the recent downward trend, the S&P 500 is up 25.35% for the past 12-month period.
The Dow Jones Industrial Average has been a bit creakier, down 0.96% year to date, but still up 21.51% for the past year.
It’s doubtful, then, that the markets will break any records this month. But if you believe the hype, good things are headed our way. The unemployment rate has slimmed down to 6.7%, gross domestic product (GDP) was revised upward to 3.6% for the third quarter of 2013 and, with Janet Yellen’s appointment to head the Federal Reserve Board, quantitative easing can continue ad nausem.
So why worry?
To begin with, as we explained last week, the falling unemployment rate is an illusion. The rate dropped only because so many people have stopped looking for work. The number of non-working Americans exceeds 102 million, which is a record.