I get annoyed with the “glass-half-empty” school of thought that frets too much about potential risks such as rising inflation and Federal Reserve tapering, when in fact, the financial glass is more than half full.

Considering the socio-economic damage wrought by the coronavirus pandemic, we’re lucky to have a glass at all.

Don’t overthink the negativity served up by the daily news. Stick to your long-term strategy. Corporate earnings are soaring, and the global economy is growing. There’s plenty of water in the glass to sustain investors. Inflation is rising but in recent months, I’ve been advising you to implement inflation hedges. It’s still not too late to do so.

Watch This Video: Inflation Hedges Are Gaining in Popularity

On Monday, the Dow Jones Industrial Average and the S&P 500 started the month of November by closing at all-time highs. The major U.S. stock indices all rose as follows: The Dow +94.28 (+0.26%); the S&P 500 +8.29 (+0.18%); the tech-heavy NASDAQ +97.53 (+0.63%); and the small-cap Russell 2000 +60.93 (+2.65%). In pre-market futures trading Tuesday, the major indices were little changed.

To date, 56% of S&P 500 companies have reported actual third-quarter earnings per share (EPS) results. Among those companies, 82% have reported a positive EPS surprise and 75% have reported a positive revenue surprise.

For Q3 2021, the blended year-over-year EPS growth rate for the S&P 500 is 36.6%. “Blended” combines actual results with projected ones. If 36.6% turns out to be the actual growth rate for Q3, it will represent the third-highest EPS growth rate reported by the index since 2010.

All 11 S&P 500 sectors are posting year-over-year EPS growth, led by the energy, materials, industrials, information technology, financials, and communication services sectors.

Q3 earnings expectations keep improving, in tandem with strengthening economic conditions. On September 30, the estimated EPS growth rate for Q3 2021 was 27.4%.

Although October is historically a poor month for the stock market, the markets thrived last month.

Watch This VIDEO: Autumn Turns Plentiful for Investors

Some investors are spooked by the Federal Reserve’s imminent tapering of its bond purchases, but considering the massive amount of stimulus the Fed has served up this year, no one should be surprised that the central bank is pulling in the reins.

More importantly, the Fed is unlikely to start raising short-term rates, via the federal funds rate, anytime soon. While the Fed’s bond purchases have provided stimulus by lowering long-term rates, the true tightening cycle doesn’t begin until short-term rates start to rise again. And that actually could be a couple of years away, unless the Fed decides to move its goalposts.

But even if the Fed starts to lower the amount of its monthly bond purchases as soon as this month, it is likely to do so gradually or even pause to gauge the initial effect. The Fed is tapping, not stomping, on the brakes.

Energy gets off the ropes…

The most significant tailwind for stock appreciation in recent weeks has been solid earnings performance, a dynamic that’s on pace to continue for the rest of the year and into 2022.

Six sectors have recorded an increase in their bottom-up EPS estimate for Q4 during the first month of the quarter, led by the energy (+21.5%) and materials (+4.7%) sectors. Five sectors have posted a decline in their bottom-up estimate for Q4 during this period, led by industrials (-8.2%):

Energy has been the star performer for Q3 2021, but keep in mind, the baseline was abnormally low due to demand destruction and imploding energy prices during the worst of the pandemic. The energy sector is reporting earnings of $23.6 billion for Q3 2021 compared to a loss of -$1.5 billion in Q3 2020.

In April 2020, we witnessed the extraordinary event of crude oil prices dropping into negative territory. But in recent months, as demand picks up and supply imbalances persist, oil prices have soared. Accordingly, the shares of energy stocks have racked up big gains.

The benchmark SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has generated a year-to-date daily total return of 38.2%, compared to 21.6% for the SPDR S&P 500 ETF Trust (SPY), as of market close November 1. That’s generally good news for all investors, even those without exposure to energy equities, because a rebounding energy sector is indicative of economic recovery.

Despite the transition to green energy, oil remains the most valuable commodity in the world. Indeed, the stocks of commodity producers are appealing now. They’ve enjoyed market-beating price appreciation this year and they’re positioned to take off in 2022.

Such equities are leveraged to moves in the price of the relevant commodity, but with less risk than futures contracts. Want to learn the identity of our top commodity stock pick? Click here for our free research report.

John Persinos is the editorial director of Investing Daily. Subscribe to his video channel.