Sitting in the chair that I do, I take quite a bit for granted, not least of which is that things I deal with every day—for example, the Fed—are important. Yet when you stop and look at it, if you are not in the middle of the financial news flow, it isn’t obvious (at least it wouldn't be to me) exactly why that is. Why is there so much coverage of Fed meetings and, at the moment, the selection of a new chair to run the Fed? Today, let’s take a step back and think about why the Fed matters to you and why you should care.

In part 4 of this series, we concluded that the map was separating from the territory, along with the reasons why that was so. Today, let’s take a look at what to do about it.

As I mentioned yesterday in part 3, passive investing is a rule-based system and a fairly simple one. Put your money into an index, and buy all of the components at the current weight. This is the case regardless of whether you purchase a mutual fund, ETF, or some other vehicle. You simply buy the index, taking its weights as gospel.

Last Friday, we talked about how artificial intelligence (AI) is, at heart, something simple: a set of rules and if-then statements. As such, AI can be very helpful in a simple environment, where relationships and rules remain constant, but it tends to stumble when those rules change. Waze, which is a great example of this, lives in a world of maps. It is very useful, but it fails when the reality doesn’t match up with the map. Any self-driving car will have to take closed roads, weather, and crazy drivers into account, which works well much of the time, but not always.

As I mentioned in part 1 of The State of the Market, today I’d like to take a side trip into a different area: artificial intelligence (AI). One of the key themes we see pretty much everywhere these days is that computers, or robots, are taking over the world. This “age of automation,” as I will call it, is often seen as the rise of the machines (think the Terminator movies) and the associated demise of human jobs.

After talking about where the bubble is and then Black Monday, there is something we must acknowledge: despite all the hand-wringing, the market is high and seems to be rising even further. Like the bumblebee— which, according to all sorts of sophisticated aerodynamic analysis, cannot fly—the market doesn’t know it can’t go higher and so it does.

October 19, 1987, is a date that will live in stock market infamy. Known as Black Monday, it marks the largest one-day loss in history, with the Dow down exactly 508 points (22.61 percent).

Have you noticed how hard it is to blow a bubble these days? Things that were once considered out-and-out, no-doubt-about-it bubbles now get a “meh, I’ve seen bigger” reaction. It seems we’re all a bit jaded.

One of the key points in my argument that things are actually pretty good—and likely to get better—has been that with a growing economy, companies are selling more and making more money. Rising profits, especially on a per-share basis, are the foundation for a rising market.

I am at the Commonwealth National Conference in San Diego this week, talking with advisors from all around the country. Similar to the Financial Planning Association conference that I attended last week, everyone here wants to know what the market is going to do. In the short term, I suspect it is likely to keep rising.