Today, I'm sharing some of my favorite investing and economic charts from the past month.

These charts cover topics like:

• Unemployment rate changes
• Wages and inflation
• Investor sentiment...and more!

It's been two years since the last market high.

Given that, I thought it would be interesting to show how things have changed since then and one big thing that has not.

Let’s start with what hasn’t changed…

1.) Patience Was the Right Approach (Again)

As noted above, after two years of waiting, the market has reached new all-time highs again.

This is a vindication of sorts for long-term investors like us who advocated for and exercised patience over that time.

We should remember this lesson (and feeling) because we know that patience and discipline will be required again and again as we continue investing through retirement.

Now, for all the things that have changed…

2.) Unemployment Has Declined

Despite the assumption that interest rate hikes would cause a recession, unemployment has actually declined over the past two years.

Specifically, it dropped from 4% in January 2022 to 3.7% as of December 31, 2023.

An already low level of unemployment miraculously got even lower.

3.) Wages Have Increased

As if being close to full employment isn't enough, wages have actually risen.

And not just nominally; they've gone up even after accounting for the dramatic spikes in inflation we experienced.

Given the media's ongoing rhetoric, most people will probably find this surprising.

And while nobody is excited to pay more for the things we need, at least wages have helped offset those increases.

4.) Gross Domestic Product (GDP) Has Increased Too

A recession is generally defined as two consecutive quarters of GDP decline.

(GDP is typically considered the best measure of our country's economic health.)

While we've endured near-constant recession forecasts (with one major media outlet incredibly—and wrongly—predicting a recession with 100% certainty!), GDP has steadily grown.

This is yet another reminder of why we believe that acting on forecasts is a source of risk...

...a source of risk that is IN YOUR CONTROL. 😊

5.) Consumer Spending Has Been Strong

A significant driver of the GDP growth above is consumer spending (which has been extremely strong).

Yet again, even after accounting for inflation, consumption has grown.

While part of this spending can still be tied back to pandemic-era stimulus, it's also a sign of economic optimism, which we should not overlook.

6.) Construction Spending is Also Robust

Since the start of 2022, companies have invested in their future at an incredible rate.

While that spending has leveled off over the past year, it has done so at a notably higher level than it was pre-pandemic.

Additionally, construction spending in U.S. manufacturing is practically off the charts, and new business applications are up as well.

The fact that companies are feeling optimistic enough to invest in their future bodes well for long-term shareholders like us.

7.) The Fed Has Firepower Again

As good as all the charts above surely are, perhaps none are as important as this chart.

Because at the start of 2022, the Fed had nowhere to go with rates at zero.

Given that, one of the significant worries facing the market and economy was:

Well, the Fed now has significant breathing room again, with rates above 5%.

Few people think rates will stay where they're at.

But to have experienced the economic boom we have (albeit with little market growth) during a time when the Fed rapidly raised rates is remarkable.

At the very least, when there is trouble again, there is something the Fed can do to help.

8.) Investors At Large Are Finally Turning Optimistic

For the last two years, I've been pointing out all the good things that have been happening across the economy and global markets.

Today's charts are an excellent summary of many things we've discussed...

...and it looks like the rest of the world is finally beginning to take notice as consumer sentiment has reached its highest level since July 2021.

Better late than never, I suppose.

In Summary

It's been an interesting two years: an economic boom coupled with market malaise.

We've endured multiple crises (both real and manufactured) that were all advertised as the end of the world.

And yet, here we are, standing atop the mountain once again.

As I alluded to earlier, I hope you will see this occasion as a validation of my "stay the course" philosophy.

Or, perhaps one step further, I hope this experience deepens your belief in the enduring philosophies my team and I espouse.

Shifting our focus toward the future, long-term optimism is the only perspective that squares with the course of history, both in the market and humanity in general.

I continue to believe that.

But I also know that the short-term is perpetually uncertain, so investors should stay battle-ready for whatever lies ahead.

As for today, I hope you find these charts helpful and encouraging.

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