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On August 5, 2016 the S&P 500 Index and the Nasdaq index both reached record highs.  And the Dow Jones Industrial Average is only 52 points away from its all-time high.  So what is an investor to do now that the markets have risen so much?  Some profit taking at these levels would be prudent.  However, in my opinion, the stock markets in the U.S. will continue to rise.  Many economic reports, including the last two jobs reports, show the U.S. economy continuing to grow.  The second quarter, 2016 gross domestic product showed a growth rate of 1.2% annualized.  While this is not much to cheer about, it does show that the economy is continuing to rise.  The slow rise in the second quarter GDP will push any further rate increases by the Federal Reserve to later in the year, most likely in December.

In the world of investing, U.S. stocks look like “the best house in a bad neighborhood.”  The rate of interest received from money market funds in close to zero.  The interest rate on a ten year U.S. Treasury Note is less than 1.6%.  As a result many high quality stocks like Johnson & Johnson, Verizon, and General Electric have dividend yields that are significantly higher than the ten year U.S. Treasury Note while providing greater upside potential.  Even though the U.S. stock markets are selling at or near record highs I still think that they are the best game in town