Heads Down, Mouths Shut: The Distracted Generation
To say there is a lot going on in the world right now is probably an understatement. The current events of the moment are so cumbersome and so complex that for many it has become emotionally and physically taxing.
The interesting thing about the emotion piece is that most of us are walking around unable to muster up emotion for anyone or anything that doesn’t directly affect our own lives. That is to say that we would rather lose ourselves in the joy of Beyonce’s pregnancy or the latest You Tube video of someone making a fool of themselves in an effort to ignore and/or not fully participate in the more pressing issues of the moment. As an avid watcher of the hit show: The Walking Dead, I am more and more convinced that our story – like the show will never be about the zombies or the villains who destroyed humanity; but rather the human beings that were so out of touch with reality that they allowed it to happen.
Of course there will be the bunch who say: “I can enjoy pop culture and be just as socially vigilant as the next soldier”. Sure you can. I will not deny you your joy. Lose yourself. However, I will wager you that the people dying in Aleppo have no distractions; nothing to divert their attention from the daily horror of their own lives. The biggest diversion those poor people have is the pain of losing loved ones, the periodic pleas over social media to save them, and the hunger pangs plaguing them for weeks at a time.
Do you think the people of Flint, Michigan have the luxury of caring about pop culture or the latest viral video when they are going on their third year of having lead-ridden water to drink, cook, and bathe with?
What freedom to divert attention do the people of Pinellas County, Florida have as 95% of their students continue to fail reading and writing with a white-run board of education who prides themselves on incarcerating young black children for minor offenses?
Enjoy your diversions, your bubbles, and all of the things that make you comfortable and happy daily. I simply hope that the freedom to enjoy those things is never taken away from you. I hope you never have to become invisible to a whole society of people who value their diversions more than your well-being.
I hope that you never encounter an injustice so horrible that people leave you to cope in deafening silence, because they are afraid to lose what little has been afforded them.
By all means, keep your head down at that job where you can’t seem to make strides, but affords you a regular check. Keep your mouth shut so as to not stir your friends, family and professional network – I’m sure they will all come to your rescue should misfortune befall you.
Personally, I cannot keep my head down. I will not keep quiet. I have watched enough atrocities to know that I am quite fortunate and at any moment it can all be taken away from me. Nothing that is granted is indefinite. I know enough to know that I cannot cure all of society’s ills, but I know that to not step up and lend a hand is a moral sin.
As we all continue to watch many of the constructs of society and government crumble before us, we need to ask ourselves whether we are going to be proactive and do our part; or wait until misfortune hits closer to home to snap out of it and into action.
Please know the goal has always been for each of us to be so wrapped up in self-preservation, survival and distractions that we remain oblivious to all of the underhanded things going on right under our noses.
If you want to know what’s going on you merely have to stop and pay attention to what is going on and the connectivity of each event. Enjoy the glimmers of beauty still present for our enjoyment regularly; but please also recognize that your ability to enjoy those moments is a privilege many do not have.
Ultimately it is your choice to stay abreast or to live in ignorance. Choose wisely.
Do Valuations Matter?
Written by: David Lebovitz
The S&P 500 has had an impressive start to the year, rising over 4% year-to-date with only three days of negative performance.
However, as the equity market has moved higher, investors have become increasingly concerned about valuation. While it is difficult to ignore the fact that the S&P 500 forward P/E ratio currently sits at 18.5x, well above its 25-year average of 16.0x, we believe elevated valuations may be justified for three reasons. First, 2018 earnings growth is expected to come in around 15%, suggesting investors will be compensated for paying a higher price, and second, inflation and interest rates are both below their long-term averages. In an environment of low rates, low inflation, and healthy earnings, perhaps it is appropriate for stock market valuations to be above average?
Finally, valuation is not a great predictor of short-term returns. As we show on page 6 of the Guide to the Markets, valuation tells you very little about what will happen over the next year, but a decent amount about what to expect over the next five years. For those who are still skeptical about equities given current valuations, it is important to remember that bull markets tend to go out with a bang, rising by an average of 26% during their final 12 months. This makes sitting on the sidelines expensive, particularly in a world of low interest rates.
So are valuations concerning? They have our attention, but we remain cautiously optimistic that equities can continue to push higher. However, late cycle markets require a more nuanced approach to investing, meaning active management will be essential. As such, we continue to see opportunity in the more value-oriented sectors of the market, with energy and financials being two of our favorite ideas.
Low inflation and yields can support higher multiples
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Opinions and statements of market trends that are based on current market conditions constitute our judgment and are subject to change without notice. These views described may not be suitable for all investors. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations. Past performance is no guarantee of future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost. ETF shares are bought and sold throughout the day on an exchange at market price (not NAV) through a brokerage account, and are not individually redeemed from the fund. Shares may only be sold or redeemed directly from a fund by Authorized Participants, in very large creation/redemption units. For all products, brokerage commissions will reduce returns.
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