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Paulsen's Perspective

Sep 24 2020

A Decade Of Strong U.S. Economic Growth?

  • Sep 24, 2020

Amid an ongoing pandemic, and after years of extremely subpar economic growth, few anticipate the possibility the U.S. economy could be headed for an era of much stronger growth. However, the accompanying chart illustrates a historical indicator that suggests the U.S. may be on the cusp of a prolonged period of healthy economic growth.

Sep 22 2020

Time To “Broaden” Bets?

  • Sep 22, 2020

Broader stock-market plays beyond new-era technology and communications have been generally matching the overall S&P 500 since it bottomed in March. However, these more widespread market plays—including cyclical sectors, small caps, value stocks, and international investments—seem poised to take a more significant leadership role in this bull market in the coming year.

Sep 17 2020

Low Yields Provide Rarified Air For Stocks!

  • Sep 17, 2020

Bond yields and earnings are both currently low.

During the post-war era, the stock market has done best when yields have been the lowest (despite the fact that low yields are often associated with poor earnings results). This is illustrated in Chart 1, which shows the S&P 500 average annualized total return and the frequency of negative monthly returns by U.S. bond yield quartiles (1950-to-date).

Sep 11 2020

Wall Street Divorced From, ahem, “WED TO” Main Street?

  • Sep 11, 2020

There is a widespread, consensus narrative that Wall Street Bullishness is divorced from Main Street Fundamentals. With things so bad on Main Street, the only reason the stock market keeps rising is because of a steady, massive, and unprecedented supply of “Sugar” being provided by both monetary and fiscal authorities. Once the sugar stops, the narrative goes, the stock market party is bound to end badly!

Sep 10 2020


  • Sep 10, 2020

The emotional fallout associated with the COVID-19 crisis produced an unprecedented reaction—or overreaction—by businesses, consumers, investors, and policy officials, which could play a major role in shaping the economic and financial-market landscape in the coming year.

Sep 02 2020

Looking Through A 1980’s Mirror?

  • Sep 2, 2020

History doesn’t repeat, but it often rhymes, and sometimes it “reflects!” Forty years ago, the U.S. was at the tail end of its worst inflationary spiral in history and inflationary fears permeated the behaviors of consumers, businesses, politicians, and policy officials. Here in 2020, after more than a decade of disinflation/deflation, chronically falling/negative yields, and weak/contracting economic growth, economic stagnation fears are rampant and it is like watching a mirror image of 1980.

Aug 27 2020

Pandemic Profitability?

  • Aug 27, 2020

The COVID-19 pandemic caused the greatest quarterly and year-over-year real GDP contractions of the post-war era, and corporate earnings should have been devastated. But, as shown in Chart 1, by historic standards, S&P 500 earnings per share (EPS) suffered only a relatively small decline. 

Aug 24 2020

Output Gap Adjusted Price/Earnings Multiple

  • Aug 24, 2020

As the S&P 500 reaches a new high, investors are increasingly alarmed by its valuation. And rightly so! Nearly every traditional valuation measure suggests the stock market is trading near all-time record levels. If conventional valuation models are accurate, the stock market appears to have very little upside potential and, ultimately, considerable downside risk. 

Aug 17 2020

After Enduring The “BUST,” Why Miss The “BOOM?”

  • Aug 17, 2020

There are still significant risks surrounding the economic outlook. The pandemic may again worsen this fall or winter necessitating another lockdown of economic activity; without additional fiscal relief, rental payments and business bankruptcies could become overwhelming. 

Aug 13 2020

The Mighty Micros!

  • Aug 13, 2020

The good-looking big boys and girls have been touted as the only game in town this year. These large, domestic, safe, easily recognized, fast-growing, and sexy stocks have been the ticket! Straying has been costly—international stocks, small caps, cyclicals, and value plays have all trailed. 

Aug 11 2020

2021 Earnings?

  • Aug 11, 2020

Last Friday’s employment report illuminated that the U.S. economy continues to recover from its pandemic-induced shutdown. Indeed, the Atlanta Fed GDPNow U.S. real GDP forecast for the current quarter is an astounding 20.5%! Bouncing back from the worst ever post-war economic collapse, the U.S. is headed for some gaudy economic numbers in the contemporary quarter. The question facing investors is what are the implications for earnings results next year?

Aug 06 2020

Stocks “Not Named FAANG” Also Participating In This Bull Market!

  • Aug 6, 2020

There is a consensus narrative suggesting that unless a stock is called Tech or FAANG, it is not participating in this stock market rally. Indeed, much consternation surrounds the fact that the FAANG 5 (the five biggest FAANG stocks) now comprise about 25% of S&P 500 total market capitalization.

Aug 03 2020


  • Aug 3, 2020

Just a handful of quick concepts to ponder this week.

Jul 29 2020

A Superfecta!

  • Jul 29, 2020

While the S&P 500 is still off by about 5% from its all-time high and is essentially flat since year-end, it has surged by 45% from its March bear market low. For many, its amazing recovery in the face of an ongoing pandemic and considerable evidence of strife on Main Street suggests caution is warranted.

Jul 24 2020

[Retracted] Better To Own The Winners Or Avoid The Losers?

  • Jul 24, 2020

This article has been retracted.

Jul 21 2020

Prodigious Policy!

  • Jul 21, 2020

Of the many extraordinary events that have occurred so far in the contemporary crisis, U.S. economic policy is near the top of the list. Monetary and fiscal authorities have responded to this pandemic faster, and with greater force, than ever. Chart 1 introduces the U.S. Economic Policy Indicator, defined as the excess pace of money-supply growth above economic activity, plus the level of federal-deficit spending as a percent of nominal GDP.

Jul 17 2020

Tech Stocks Dominating Market Cap AND GDP!

  • Jul 17, 2020

The Technology sector now comprises about 27% of the total S&P 500 market capitalization, its highest representation since it peaked near 34% during the 2000 dot-com bubble. Moreover, there is growing concern about the outsized impact of the popular FAANGs and the fact that so few companies are increasingly responsible for much of the overall stock market’s ongoing recovery

Jul 13 2020

Not Your Parents' Growth Or Value?

  • Jul 13, 2020

Value stocks and growth stocks have recently created angst for investors. Value investing reflects an entrenched, losing momentum and the growth style increasingly appears like a bubble in search of a bust. This isn’t exactly a new trend—growth has been besting value for much of the last 15 years, but it has accelerated mightily since year-end, escalating concerns among both value and growth investors.

Jul 02 2020

The Payroll Prophecy!

  • Jul 2, 2020

Should this morning’s payroll-employment report cause stock investors to tremble? Probably not.

Jun 29 2020

Bull Market Possibilities

  • Jun 29, 2020

From its March 23rd low to its recent high, the S&P 500 surged by almost 45%! Is the speed and size of its rally too much, too fast?

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