The Election Muddle Aside, Investing Has Been a Snap Lately

Midyear is a good time to assess investing strategy, looking back at where the markets have been and ahead at prospects for the second half.

Looking back at returns over the last six to 12 months will be enjoyable for many people because the stock market, the main engine for most investment portfolios, has performed splendidly.

Looking ahead, on the other hand, requires even more squinting than usual.

Market and economic forecasts are exercises in informed speculation. But with American politics in a muddle, any market outlook for the second half of the year is a leap into the unknown.

Fortunately, when I put on my investing hat, I try to ignore market forecasts and politics. Academic research suggests that sticking to a long-term plan using broad, low-cost index funds that track the world’s stock and bond markets makes sense for most people, most of the time.

Tuning out politics entirely isn’t realistic now. Course corrections are sometimes needed when the world changes in big ways. This could turn out to be one of those times.

Giants Rule

The S&P 500, the leading stock market index returned nearly 25 percent, including dividends, in the 12 months through June — a glittering gain you may have approximated for yourself with a low-cost S&P 500 index fund.