Despite chaotic geopolitical tensions taking over the news this week, the stock market rebounded with many advisors thinking the market will continue to rise.
Why did the stock market react well on Thursday despite the week’s earlier chaos? Financial Advisor Magazine spoke with Ashfield Capital Partners Chief Executive Officer Peter Johnson for insights. According to Johnson, this was due to the stable economic fundamentals of the United States.
“You have to look beyond the headline noise” of everything from impeachment to Iran, explains Johnson. “The economy is doing well and it can continue. When people are talking about the headlines, they are not talking about the fundamentals, which are doing well.”
He adds that several countries from around the globe are pumping capital into their economies, which is a long-term development that helps the economy in the United States and abroad. In addition, many political crises in the last 50 years have been followed by strong performance in the capital markets.
“The tax cuts, low unemployment and low interest rates are part of the economic fundamentals that are strong,” Johnson says.