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One of the hot animated movies last year was Up. If you didn’t see it - you should rent it. Basically an older gentleman (probably my age) loses his wife and is dragged into a series of high flying (hence the name) adventures with a small boy in his balloon powered flying house. There is a lot of symbolism here which you can ignore or embrace depending on your politics.
What does that have to do with the world of finance you might ask (and rightly so) A number of things - number one is that the market is headed in the same direction as the title of the movie UP. Today’s close above 10,450 is well within reach of the year’s highs.
Secondly, a balloon powered house would seem to be relatively fragile and helium powered propulsion of the house be somewhat hot airish. The market superficially seems that way too moving up at the same time that unemployment rises and the dollar declines. The old adage of the market climbing a wall of worry surely applies these days.
Finally, the older gentleman in the movie learns to adapt and change. Many investors are facing a new reality of low interest rates, a weak dollar and potential inflation.
These are difficult times for all investors — stock investors have seen two 50% @&P 500 corrections over the last decade. Bank depositors have seen the collapse of the yields on CDs and are left trying to reinvest the proceeds at markedly lower rates now. Our advice is to embrace change and never be too old (in spirit or age) to try something different. CD buyers might do well to incorporate a bond fund such as PIMCO Total Return in their portfolios. Conversely, dyed in the wool stock buyers could do well with a guaranteed investment to offset stock volatility as well.
Enjoy the Thanksgiving holiday.