December 6, 2013

This is Mark Vickery covering for Sheraz Mian, who will be away on business until the second week of December.

To complete a week that saw stock market traders cower in fear from a strengthening U.S. economy, the Bureau of Labor Statistics (BLS) came out with its monthly nonfarm payroll report this morning, and results were better than expected. New jobs created for the past month reached 203K, up from the 180K expected. The unemployment rate fell to 7.0%, down from the 7.2% expected, and the lowest number since George W. Bush was still president.

But tell that to market traders weeping that their days of suckling at the Federal Reserve's teat are all but numbered; it should by now be common knowledge that there's ultimately no such thing as a free lunch, but apparently some folks are just now coming to this realization. Or, to put it another way, to paraphrase Chicken Little, "The sky is expanding! The sky is expanding!"

I'm sure this has been a frustrating week for upstanding investors who want to see their portfolios gain but are also interested in seeing an improved economy overall. Even for just selfish reasons, a growing economy is better for everyone; you'd then be able to choose from a wider swath of companies and industries in which to invest. It's the rising tide that lifts all boats. Period.

Obviously, we've seen better weeks in the stock market in 2013. But the reasons why ought to amuse you, not concern you terribly, unless you are someone who wants the federal government holding your hand every step through your entire life. The fact is, we haven't seen a week of strong economic numbers across the board like this in years. Years. From a positive ADP surprise on Wednesday to jobless claims seeming to look for a range around 300K, things are looking up from a somewhat longer-term perspective.

So if you are one of those investors keep doing what you're doing, even if your stocks are down on the week and your initial impulse is to wring your hands and sell before the bottom falls out. The bottom's not falling out. Yes, the market may have already baked-in some of the positive news about the economy ahead of time, but if we reach a "new normal" we are likely to see multiples expanding further into 2014.

"The sky is expanding," indeed. Consider taking advantage.

Mark Vickery
Senior Editor