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What to Make of the Market Surge

Just after the new year, the Dow Jones Industrial Average closed above 25,000. Then, on January 17, it closed above 26,000. Other market indices have recorded similar rises. So what’s going on?

Well, remember the story about the three blind men and the elephant? Each of the men was touching a different part of the elephant and so had a different opinion about the kind of animal it was. That's similar to how observers see the recent market surge.

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Market Quietly Brings Good News as Bad News Grabs Our Attention

If you pay attention only to your favorite newspaper or news channel or news feed, you might be of the opinion that things are going to hell in a handbasket -- whatever political landscape you favor. In addition to national tragedies such as the mass shooting in Las Vegas and hurricanes in Texas, Florida and Puerto Rico, there are congressional battles, international saber rattling, Cabinet upheaval and arguments about NFL players either kneeling or not kneeling. It can seem there is a circus going on in Washington.

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Markets Digest Good News, Bad News

There is a lot of news these days, but the markets don't seem to be paying much attention. The big jumps that followed the election have mostly leveled off, at least for the moment. Instead, the markets seem focused on the kind of data that drives economic rather than political fortunes. And that data is largely mixed.

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In Investing, Fundamentals Trump Politics

More than two months into the Trump presidency, its effect on the markets remains unclear. After a brief dip right after the election, the Dow Jones Industrial Average started a climb that topped out at a record-breaking close of 21,115 on March 1. Most market watchers gave at least some of the credit for the rise to optimism on the part of companies and investors about the new president's commitment to reducing regulations, cutting taxes and otherwise enacting a business-friendly agenda.

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The Markets and the New Administration

As we near the inauguration of President-elect Donald Trump, there seems to be a kind of underlying nervousness among many investors. This is not unusual; investors are often concerned about how the markets will adapt to a new administration. But it could be more profound than usual this time around.

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Here's Something You Can Do Something About

The markets continue to be stuck in the sort of holding pattern in which they have been stuck for months. They go up and down, but for the most part they are within a fairly small range, and they have been unable to sustain a good run.

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Worrying About the Wrong Things?

Most investors worry about the impact that certain events might have on the movement of the markets. However, the things many investors choose to worry about are often not likely to have any serious long-term effect.

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Hopping Around; Going Nowhere

Despite a fair amount of movement up and down so far in 2016, the market does not seem to be experiencing any long-term movement. In fact, Jim Paulsen, the chief market strategist at Wells Capital Management, recently referred to this as "a bunny market" because it "hops around a bit but really doesn’t go anywhere."

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Bad Time for Creative Investing

The U.S. stock markets were characterized by volatility throughout much of 2015, and the trend has continued through the start of 2016. At least until the markets settle down, we at Peachtree Investments believe this is not the time to get creative with your investing. Instead, we believe the best approach is to stick to the tried-and-true.

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Still Prettiest Girl at the Dance

The U.S. stock market has been volatile and essentially flat this year, and some investors are considering changing partners. But we believe that the U.S. market is still the prettiest girl at the dance, even though her makeup might be a little smudged and her gown a little worn.

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The Circle Game

It was 1970 when folksinger Joni Mitchell wrote about going "round and round and round in the circle game." That image seems to fit today's stock market. Every day seems to bring some kind of big news that threatens to send the markets into a tailspin or offers the hope of a huge rally. And yet, after all the ups and downs, it ends up more or less where it started.

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Show Me the Dividends

Dividends always have been a primary part of the investment philosophy of Peachtree Investment Partners. But in markets such as we are currently experiencing -- where stocks go wildly up and down but end up essentially flat -- dividends take on particular importance.

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It's a Big, Wide World, Economically Speaking

The English poet John Donne famously said, "No man is an island." The same is true of countries and their economies. And that accounts for much of the volatility in U.S. markets over the last several months.

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Staying In Your Lane

Have you ever been driving along the highway and seen another driver constantly changing lanes and cutting cars off -- putting himself and other drivers at risk -- only to wind up no farther ahead than he would have been if he had stayed where he was? The markets right now are a little like that, as some investors are nervously switching their investment approach.

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The Importance of Earnings

Especially since the Dow Jones Industrial Average has been flirting with and then finally topped the 17,000 mark, the doom-sayers have been out in force. Like Chicken Little in the well-known children's story, they are certain that the sky is falling on the market recovery.

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Tug of War

The performance of the financial markets seems to be tied to the outcome of an ongoing game of tug of war between a couple of powerful forces.

On one side are increasing interest rates. After years of keeping interest rates low to stimulate spending -– and therefore economic growth -- the Federal Reserve has made clear that it intends to start increasing rates slowly until they are back at more normal levels.

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What Happens Next?

The 113th Congress so far is the least productive in history. Paralyzed by gridlock, Congress sent a record low number of bills to the president for his signature and instead spent endless amounts of time on pointless debates; for example, the House more than 40 times voted to dismantle the Affordable Care Act, although such a move was doomed in the Senate.

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Without Washington. . .

Regardless of which side you are on, you have to agree that our elected representatives in Washington could mess up a two-car funeral. As of this writing, they are engaged in an increasingly serious game of chicken that already has shut down large parts of the government and is threatening -- for the first time ever -- to fail to raise the debt ceiling to allow the U.S. to make the payments on loans and other government spending that these same elected representatives earlier authorized.

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Through the Looking-Glass

Observers of the financial markets in the last month or so must have felt a little like Alice in "Through the Looking-Glass" -- everything seems like the reverse of what it should be. More people find jobs? The markets fall. More people out of work? The markets rise.

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Just What the Doctor Ordered

As chairman of the Federal Reserve, Ben Bernanke functions rather like a physician to the nation's economy. And by late 2008, his patient was on life support. The stock market was in a free fall, unemployment was shooting up, and the housing bubble had burst, taking with it a lot of the net worth of millions of ordinary Americans.

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Keep Your Eye on the Ball

Great hitters in baseball have an ability to block out everything except the ball coming out of the pitcher's hand. They don't hear the crowd, they don't see the fielders, they don't focus on anything but the ball. That's why they are successful.

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Back to the Future

Many investors seem to be a little skittish these days. Perhaps it is the fact that, after a very strong performance in the third quarter, the market has leveled out somewhat. Perhaps it is concern about the results of the upcoming election. Perhaps it is worries about political and economic events abroad.

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