Bull markets occur between the polar emotions of fear and greed. Following a correction, or larger bear market, fearful investors slowly dip their toes back into the equity pool. Increasing cash allocations, improved earnings and rising economic tides gradually tempt ever more investors to reengage. Share buybacks, mergers and acquisitions thin the pool of available shares, effectively enhancing the perception of those still available.
Eventually, the market pulls further away from its nadir, always climbing the proverbial "wall of worry" as stocks rise amid the conflicting sentiments of fear and hope.

Demonstratively, consider the market machinations this January, only five months ago. In roughly three weeks, the S&P 500 declined some 5.76 percent. The culminating week saw U.S. stock funds and ETFs record their largest-ever weekly dollar withdrawals. This mini panic, replete with all the typical apocalyptic media undertones, sent investors scrambling for the exits. Only to see markets recover quickly and ascend new heights.
That is how this journey must proceed. Anxiously. Dourly. Uncertainly. Riddled with concerns over the U.S. and European economies, Chinese growth and the situation in Ukraine. So long as investors find cause for anxiety, then this market can climb. For as Bernard Baruch said, the main purpose of the stock market is to make fools of as many men as possible. And so it shall.
The stock market is the antidote to any cliches regarding strength in numbers. Because it offers none. When you, as an investor, look hither and yon and see that you are in perfect lockstep with other enthusiastic, fellow investors, then you best duck and run. For shots shall soon be fired. And those shots will bring the herd to freeze, glance nervously to and fro, and then run en masse for the exits. Dragging markets lower in a toxic blend of fear and ignorance.
Warren Buffett knew as much. Accumulated a fortune, in fact, while noting that "The stock market is a highly efficient mechanism for the transfer of wealth from the impatient to the patient."
Patient investors rank as few far between. While the insightful investor develops effective indicators and then simply follows the data, human beings are prone to preconceive the conclusion and then desperately search for evidence. This confirmation bias hobbles us in a number of fields, including politics, diplomacy, science, education, faith and - of course - investing.
Decidedly, nothing worthwhile comes easily.
Last week, eurozone banking contagion emerged as the principal source of anxiety. Following reports of liquidity problems within a Portuguese bank, stocks sold off while precious metals, Treasuries and other safe-haven investments rallied.
The Good
Companies are raising their earnings guidance heading into Q2 earnings season... The jobs market is truly strengthening. The employment-to-population ratio edged upward to 76.7%, a recent high... Eurozone unemployment, though high, hit a two-year low... Auto sales -- though credit driven -- were strong... Wharton professor and pundit Jeremy Siegel believes that the Dow could end the year as much as 17 percent higher than today's levels. Though that climb may be accompanied by additional volatility. See article here.
The Bad
The employment scene, while improving, remains disappointing overall. Though, it could be enough to maintain a gradually improving economic glide path without having to kill QE -- which would be positive for investors... Gas prices are slightly above their prices from one and two years ago... Mortgage and refinance applications are down... F150 truck sales, ever the American consumer bellwether, were lower -- though Ford will blame that on the upcoming release of the new model... ISM manufacturing and services both missed expectations, though slightly...
The Ugly
West Africa's Ebola outbreak has accelerated. No cure. 90% death rate. Health volunteers have been affected. And many locals believe the volunteers brought the disease to them.
Weekly Results
Major markets finished lower last week. The DJIA fell 0.73%, the S&P 500 lost 0.90%, and the Nasdaq dropped 1.60%. Small cap stocks declined 3.99%. And the 10-year Treasury bond yield was fell 2 basis points to 2.52%. Gold gained $18.60 per ounce, or 1.41%.