As a kid I always liked mazes. There was something about starting down one path only to find the need to turn around, regroup, and then back up and take another direction. Mazes are not the same as road maps. One can get temporarily lost on the road, but a map typically offers several ways to get from point A to point B. By contrast, a maze usually has only one correct route from the starting point to the end.
In keeping with the season, have you been in a corn field maze recently? During daytime a maze is often the scene of a lot of young kids running fast as they try to find their way, including the one child that chooses to just barrel straight through. Then there are the scary Halloween night mazes, with zombies lurking in the wrong turns, and strobe lights meant to disorientate. In reading the papers, and listening to the TV, one might sense that investors themselves are feeling they are currently in the middle of a maze: lost, disorientated and waiting for a zombie to pop up.
Today is Halloween and let’s pretend we have just been put in the middle of a massive corn maze. We are aimlessly walking around with hundreds of other lost souls trying to navigate the “Maze of the Market.” We are, however, veteran maze walkers. We have been in here for a long time and know a few things to look for, and a few things to avoid. There are times when the maze seems all too easy as the path before us is well worn. The joyous voices of those that have made it through give us the courage to carry on.
Today the maze of the market is showing some signals that things might be getting easier to navigate. Let’s list what is in our favor. We have only one week left until the election. Many of us have already voted (I encourage you to as well). The headlines this week discussed the massive amount of potential buying power in terms of cash on the sidelines. Across the globe central banks are still providing inexpensive money, and following an easy monetary policy. This past week over $207 billion worth of corporate takeovers and mergers were announced. These actions have been viewed as a sign of future confidence from the corporate world. A wonderful NY Times article noted that even though the current US expansion might seem “old” at 7.3 years, there are plenty of examples that show that economies can run 15, 17, or even 25 years before they begin to slow. There is also strong evidence that significant investment in global infrastructure construction may actually happen. Let’s just hold hands and stay focused on our goal and continue to move forward in the market maze. We all have what it takes to get out.