From The Reformed Broker:
I like stocks here.
I have no idea what the stock market is going to do in the second half of this year. Neither do you. I have no S&P 500 target that means anything other than a guess. If you’re in search of pretended clairvoyance, there is no shortage of people who will give it to you.
But I have something more valuable than that nonsense for you. I have a reasoned, mature, rational list of 10 reasons I prefer owning stocks to not owning stocks for the second half of this year.
I am not saying I hold nothing else besides stocks, nor am I inferring that I’m all in. I could easily lay out 10 reasons to avoid stocks (because I read and have a pulse), but I feel the case to be long is more compelling. Here’s why:
10. Pessimism is now the base case scenario. This means that any positive news, from any quarter, should have an outsized effect on asset prices. Take housing for example – a more important cog in the wealth effect wheel than any other facet of the economy (housing is 10X more important to American confidence, employment and spending than the price of the Dow Jones Average). Anyway, the housing market is alive. It’s good, not great. But it’s on the upswing and no one believes it. What happens when they do?
9. The negatives are…