Obsessing Over Profit Margins Is Good Way to Miss S&P 500 Gains

Falling profit margins provide little reason for concern that a six-year bull market in U.S. stocks is about to end, according to Pierre Lapointe, Pavilion Global Markets Ltd.’s head of global strategy and research.

The attached chart shows how margins for all U.S. companies, as compiled quarterly by the Commerce Department, compare with the performance of the Standard & Poor’s 500 Index during the past 65 years.