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A Few Trillion Reasons to Stay Bullish

Kevin Cook here to close the week for Steve...

The holidays are a good time to count your blessings and hopefully enjoy the fruits of your labor as an investor. It's also a great time to review your portfolio strategies and reflect on the trends and drivers that got you here. I actually do this more often because I have to answer a basic question every month for my subscribers...

What's driving the bull market and how far can it run? My list of 5 forces hasn't changed since I first wrote of them in January:

1) Macro risk "off" (Europe, China, Washington) = Investing risk "on" (to the upside)

2) Economic growth is good enough and building momentum

3) The Fed remains steadfastly on the side of pro-growth and reflation

4) Corporations are producing record profits and balance sheets are strong

5) Cash is still trash and fund managers MUST chase and compete for stocks.

To this list, I would add a force that proves this isn't all just theory: fund managers with trillions of dollars actually chasing and competing for stocks because of the first 5 forces. I see it proven every week when I look at the SEC institutional filings.

Bottom line: A correction could come at any time, but it will only make valuations even more attractive again - and probably pull more money from the sidelines and bonds. In short, stay long good stocks because this bull is far from over-valued territory. Maybe we'll talk about that above S&P 1900.

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Kevin Cook

Senior Stock Strategist

Zacks Investment Research

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Earnings HQ

Get the First Calendar Made for Traders.

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