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The Economy And The Stock Market Are Always Changing

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financial advisor robert stoll cfp cfa chief investment officer draft commentary Profile About

The Economy And The Stock Market Are Always Changing

We’ve been in a remarkable investment environment for the last 10 years. From the depths of the stock market lows in early 2009, the S&P 500 has increased over 400%. But what’s interesting is that the same types of companies have been leading the charge the entire time. Question is, can it continue?

The U.S. economy is always changing, including the companies that drive that change.

Think back to the early 1970’s and it was companies like Polaroid and Kodak that were the “leading” franchises in America. But now? Their core businesses (photo film) are pretty much gone. 

The graphic below demonstrates how quickly things can change in the global economy.


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Only two of the companies on the list of largest companies in the world were on that same list 9 years ago (Microsoft & Apple). Go back to the Year 2000 and we see companies like General Electric and Lucent Technologies. The former is a shell of its former self having endured a terrible 20-year run. And Lucent eventually crashed and fell into the arms of Alcatel, based out of France.

Here’s what you need to keep in mind: Things change, they change quickly, and what “works” today isn’t guaranteed to work tomorrow.

The last 10 years have seen the emergence of social media and smartphones. Six of the top 10 companies in the world today are in those industries. Will they remain there in 10 years? 5 years?

Likewise, there are other aspects of the market that have “worked” great the last 10 years (U.S. vs. International stocks, Large cap stocks vs. Small cap stocks).

But history shows that as the economy changes, so does the investment environment.

The message is to make sure you’re not lulled to sleep thinking that what’s been working will continue to work indefinitely. All those TV commercials pushing investment products say the same thing: “Past performance isn’t a guarantee of future results.” While that’s a bit of legalese, there’s some strong truth in that statement!

Wondering how this affects your future finances? Schedule a call with Financial Design Studio, financial advisors in Deer Park, to discuss your portfolio today.


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