Stay the course: fear a crash and miss the Bigger picture.

• Author: Matthew D. Pappas
• Position: Money Talk - Viewpoint essay

Fears of a market peak are reemerging. 'Investors and even advisers worry that macro trends like an aging demographic will plague the markets as retirees shift money out of stocks and into income-focused vehicles for retirement. Change is unquestionably upon us--but I believe in a much different and much more profound way.

A Deep Dive into the Data

The past few years have posted great stock returns, with the S&P 500 up 30 percent last year and 215 percent since its March '09 bottom. Corporate profit margins are near all-time highs, and we haven't had a +10 percent pullback in nearly two years. Many believe the best returns are behind us.

Sooner or later things have to come back down, right?

Not so fast. Despite recent gains, the level of equity ownership among retail investors is at a 50-year low, and it's at a 30-year low for institutional investors. Historically, bull markets end on euphoria and extreme overvaluation--neither of which is present today. U.S. stocks are trading at a price/earnings value of ~~~15.3, slightly above the 10-year average of 13.8 and still below the 25-year average of 15.5. The CAPE, or Shiner's PIE Ratio, tells a similar story: It's currently at 24.9 versus the 10-year average of 22.9 and in-line with the 25-year average of 25.0. Many international sectors are trading at even larger discounts.

Remember also, that we're in a record-low interest rate environment, even as the Fed continues its tapering strategy.

In other words, the alternatives to equities are not terribly appealing in my view (i.e. a ~2.5 percent 10-year yield on a U.S. Treasury, or underperforming commodities like gold). I also believe the macro trends point to lower rates (and inflation) for longer than most believe. That means retirees will likely need to gravitate to stocks for more total return potential to fund retirement, in my opinion.

The backdrop to this is improving U.S. economic data in areas like employment, auto sales, trucking surveys, bank loan volume and rail-car loads. What is different this year is the synchronized global growth as areas like China and Europe show more improvement. But that's not all. Entrepreneurs and private-sector innovation are reshaping the global landscape at a pace never seen before.

An Unknown Future

The fact is, it is impossible to know what's in our future. Technological innovations, agricultural advances and other social changes that are difficult to foresee will shape our future in unpredictable...