This chart shows how the S&P 500 (SNPINDEX:^GSPC) performed over the last five years. See that uptick there on the far right? That represents last week's performance, when the index soared to an all-time high, closing at 1,744 points.
If last week stands for anything, it's that investors and analysts like certainty.
On Wednesday, leaders of the U.S. Senate announced an agreement to end the two-week old impasse over the federal budget and debt limit. Hundreds of thousands of federal government employees had been furloughed since the beginning of October as the two political parties fought over the country's finances.
The last-minute deal extends the country's ability to borrow until Feb. 7 and funds the government until the middle of January.
Adding to the sense of certainty were the numerous companies that reported third-quarter earnings over the past five days.
While General Electric came up just short of analyst expectations on the top line, as my colleague Isaac Pino pointed out, it nevertheless set the stage for a "potential home run in the final quarter of the year." Google's shares eclipsed the $1,000 mark for the first time ever after reporting better-than-expected results. And even Bank of America displayed hints of the once profitable company that it may again become.
What's the takeaway for investors?
Stocks are volatile assets. They go up one week and down the next. But at the end of the day, we can say with a respectable level of certainty that over the long run they will help as opposed to hurt your chances of accumulating a comfortable retirement.
John Maxfield owns shares of Bank of America. The Motley Fool recommends and owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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