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I haven’t thrown away a business magazine since the mid-80s. The historical perspective you get as you thumb through old magazines is remarkable. I recently retrieved the magazines of the 1990s from my attic as the markets in the 90s seemed to have many similarities to the markets we are experiencing today.

As you can imagine I was immediately intrigued when I saw the cover of the U.S. News and World Report you see above. This issue is dated July 17, 1995, and the title of the cover story was “Will the Dow Hit 5,000?” Investors had just witnessed a series of events that are similar to those that now have many investors concerned.

In 1995, the economy was very strong, inflation fears were rampant and investors had seen a spike in interest rates the year before, with the 10-year treasury rates rising from 5% to over 8% in slightly over a year. As I write this, we have seen an almost 1/2-point increase in the 10-year treasury bond interest rates in the past two months, rising over 3% for the first time since 2011, and investors have been concerned that our strong economy and low unemployment rates will cause increases in wages, giving inflation a push.

Adding to everyone’s concern in 1995, the Dow had almost doubled since the 1990 correction associated with the Desert Storm Iraq invasion and increased almost 500% since the lows of the 1980-82 recession. Currently the Dow is up more than 300% since the lows of the 2008-09 Great Recession, causing concern that the markets may be inflated.

Assuming an investor was fully invested in the markets when this magazine was published, what should he or she have done? The answer is NOTHING!

When the magazine was published in 1995, the Dow stood at 4,702, and as it turned out, the Dow hit 5,000 before the end of that year and exceeded 10,000 before end of the decade! It would have been a huge mistake to do what the writers and pundits were suggesting by taking profits and getting out of the market!

New York Times Senior Economic Correspondent Neil Irwin recently penned an article titled “Is This a Mid-1990s Moment for the Economy?”, reciting many of the similarities to our markets today and outlining how productivity exploded in the late 1990s, fueling the stock markets to double again. He concluded by suggesting:

“…the 1990s are a reminder that there can be good economic surprises as well as bad ones. Predicting the future is hard. And the parallels aren’t perfect. But there’s a reason to wonder if economic history just might repeat itself.”


There are so many distractions these days that no newsletter could ever deal with all of them, but the most prevalent worry I hear in recent weeks is regarding the mid-term congressional elections and the possible changes that may ensue. “What if the Republicans lose the House?” is a common question. I know that would make some of you happy, but I like the remarks that our RJ Strategist Jeff Saut presented in his August 28 missive, quoting his friend Tony Dwyer:

“…it is essential to remember that politics may cause the market to gyrate, but Fed policy, availability of credit, economic growth and earnings cause the market to trend over time. All of these proven measures continue to be positive for equities…”

Jeff goes on:

“Ladies and gentlemen, this is a secular bull market, and the cuties that call for a crash and/or a range bound market are missing the fact that secular bull markets last for 14+ years. In past missives, we have discussed where it began: in October 2008 when most stocks bottomed, March 2009 when the averages hit their nominal lows, or in April 2013 when the averages finally exceeded their previous all-time highs. You pick it! But, wherever you're starting point, there should be years left in this bull market."

Jeff continues to believe in this market, and he has been right more than any pundit I have seen on TV. He reminded us of the famous Groucho Marx lament, “Who are you going to believe, me or your own eyes?!”, suggesting that we pay attention to what the market is telling us.

And I will conclude with a quote from Warren Buffet’s recent letter to his shareholders:

“I want to quickly acknowledge that in any upcoming day, week or even year, stocks will be riskier – far riskier – than short-term U.S. bonds. As an investor’s investment horizon lengthens, however, a diversified portfolio of U.S. equities becomes progressively less risky than bonds.”


The bottom line is that we need to be sure our investments are properly aligned to take advantage of a positive stock market while being properly balanced to dampen volatility to reduce the impact of the inevitable corrections that occasionally occur. If you have any concerns about your portfolios, let’s sit down and examine them together and make any adjustments necessary in order for you to sleep well at night.

Starting this month, you will begin seeing another name at the end of our letter. Kay O’Connell joined us early this year and has been going through all the tests and training it takes to serve as a Financial Advisor in this business.

When I chaired the Williamson County Fair, Kay was the organizational genius behind the scenes who helped me keep all the details straight. Her top priority this year has been to assist me in structuring our investment process to produce more consistent results.

I am very much enjoying having Kay as a sounding board as we explore the endless investment options we have available. I believe you will find her to be a valuable addition to our team.

Thanks again for your business and let us know if there is any way we can assist you.


Registered Principal

Financial Advisor

Kay O’Connell

Research Assistant

Financial Advisor

Kim Blackburn

Branch Operations Manager

Link to New York Time article: (

Any opinions are those of Dave Crouch and not necessarily those of RJFS or Raymond James. The

information contained in this report does not purport to be a complete description of the securities,

markets, or developments referred to in this material. There is no assurance any of the trends

mentioned will continue or forecasts will occur. The information has been obtained from sources

considered to be reliable, but Raymond James does not guarantee that the foregoing material is

accurate or complete. Any information is not a complete summary or statement of all available data

necessary for making an investment decision and does not constitute a recommendation. Investing

involves risk and you may incur a profit or loss regardless of strategy selected.

Raymond James is not affiliated with U.S. News and World Report.

The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing

30 stock of companies maintained and reviewed by the editors of the Wall Street Journal.

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