I’m a very proud American and I’m not afraid to say it.  This is by far the greatest country on the planet, and nobody will ever convince me otherwise.  It is with that feeling of patriotism that I write this article.  The reason that I bring all of this up is because there are a lot of market bears out there that may not agree with me for the long term of the US stock market.

First off, let me say that my official position on stocks is (and has always been) to be long term bullish, but short term cautious.  That means that in the near term, risk management of positions must be maintained.  However, over the long term, the US stock market has performed very well and I believe it will continue to do so.

The S&P 500 is the main benchmark of stocks in general.  It represents around 80% of all US business and commerce in one way or another.  The first thing that tells me is that 500 companies have that big of a footprint on our country.  The second thing that tells me is that if you believe in American business and its way of doing things, the S&P can give you a great correlation.

Statistically speaking, the market has returned nearly 10% on average over the past 100 years.  Of course there are years that markets decline much more than that, so please understand that the 10% number is a very loose average.  So, if you were long the S&P in 2022, you did lose money.  However, throughout history, whenever we’ve had a market pullback, it has eventually recovered to a new all-time high 100% of the time (we are still waiting on the pullback of 2022 to make new highs).  Now, does that mean that we are guaranteed to continue to hit new all-time highs?  Absolutely not!  However, what it does mean is that there is a very strong historical precedence that stocks will come back.  Mark Twain once said that history doesn’t repeat itself, but often rhymes.

As a major asset class, stocks have outperformed all others.  From a macro level, gold, silver, real estate, bonds, or anything else for that matter has underperformed stocks.  Of course there are certain areas of the other asset classes that have outperformed stocks, but on a macro level they are unbeaten.

Finally, I would like to say that America has been through a lot.  As a nation, we have survived a civil war, 2 world wars, a great depression, Korea, Vietnam, inflation of the 1970’s, the S&L crisis of the 80’s, multiple gulf wars, the dot-com bubble, the financial crisis of 2008, and now a global pandemic.  Those are just a few things that I could think of as I’m writing this.  As we all know, there are many more scary events of our past and there will be many more in our future.  The point is America has proven to be resilient time and time again.  God Bless America!

Happy 4^th of July!