“The Bull Market in Everything” was last week’s cover of The Economist magazine. Hyperbole, of course, but not entirely.
The bull market for stocks is unaffected by natural disasters, fires or man-made catastrophes such as what happened in Las Vegas. One reason is that the recent economic data are pointing toward better days ahead here and overseas, which is why the IMF raised its global growth outlook for 2018 to a healthy 3.7 percent, the fastest pace since 2011. The manufacturing sector is improving with the ISM Index, which measures purchasing activity, at a level not seen in 13 years. Buyers are optimistic. Janet Yellen was optimistic for growth and inflation at a weekend conference. So are consumers. Consumer sentiment is high. If you are a bear, it’s hard to find data to support your position. That doesn’t bothersome.
The bullish picture is not an American phenomenon. The major economies and large emerging markets are all on the same growth track. A good sign, one seldom seen. Investors here and overseas are taking note. They are optimistic and not merely about the market and key sectors like manufacturing. According to CNBC an index of optimism about the overall economy hit an all-time high last week. Why would that be? The business-friendly environment with fewer regulations and the prospect of lower individual and corporate tax rates have something to do with it.
It’s getting easier and cheaper to participate in the bull run. State Street Global Advisors entered the ETF price war by announcing a suite of ultra low-cost ETFs. One of them, the SPDR Total Stock Market ETF (SPTM), allows investors to hold the entire U.S. stock market for only a fee of 0.03 percent. Using a discount brokerage, a $100,000 investment would only cost $5 to buy and then an annual fee is only $30.
The SPDR World ex-US ETF (SPDW) tracks global stocks excluding the U.S. Its annual fee is 0.04 percent. By holding these two ETFs one can have complete global equity exposure. Gone are the days of paying high fees to hold a portfolio of a hundred stocks!
