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So far this year, the S&P 500 has achieved 17 new all-time highs amid steady economic growth, relatively goldilocks inflation, the ongoing rally in the tech sector, and momentum and growth-style factor stocks. In times like these, long-term investors need to stay diversified, keep sight of the bigger picture, and avoid chasing the performance of assets that have been working in the recent past.
The stock market continues to reach new heights, driven by a stronger-than-expected economy and the largest fast-growing technology stocks, known as the Magnificent Seven
Consumer spending is the backbone of the U.S. economy, constituting over two-thirds of our nearly $28 trillion GDP. When consumers spend money, it helps spur economic growth and reflects economic trends such as consumer sentiment, the job market, household net worth, inflation, housing prices, the stock market, etc.
The S&P 500 index recently closed above 5,000 and set a new all-time high, less than three years after it crossed the 4,000 mark. While some are understandably nervous when the market is near record levels, investors tend to grow more bullish as the momentum continues. What should investors keep in mind to stay disciplined and focused on their wealth strategies?
The day-to-day market price swings are often more about what investors expect than the underlying fundamentals. By their design, markets anticipate future events and assign them a price today. This gap between reality and expectations has recently driven stock and bond market volatility due to the Fed's latest announcement and headlines in the banking sector. So, what should investors know about these developments to stay focused long-term?
Investors worry that the situation will never improve during recessions and bear markets. When the economy and markets recover, investors fear it won't last. In both cases, investors often need help to stick to their long-term financial plans, regardless of the historical record. How can investors stay focused and invested in today's strong market environment?