Because of political and military instability in Ukraine and the Middle East, volatility rose in the U.S. stock market this past week. In addition, unfolding events caused a flight to the safety of U.S. Treasury securities, which caused yields on those securities to drop. According to the business media, China was also a big buyer of our bonds.
In spite of the issues around the world, the stock market closed the week on a strong note. For the week, the S&P 500 rose 0.5% and the NASDAQ Composite was up 0.4%.
The stock market environment is unchanged—excessive valuations, bullish sentiment, and upward price momentum with only small corrections. We are in the part of the cycle when many investors are afraid to sell stocks because they perceive there is no other alternative. My view continues to be that many years from now we will look back at today as a