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The recent recession has bred quite a few armchair economists, armed with Google, who feel inclined to repeat the same old rhetoric in the hopes that it will eventually come true.
The stock market crash of 2007-8 made alot of professional economists appear from their ruins.
One of the most common mistakes traders/investors make is making decisions based on what they THINK SHOULD BE HAPPENING rather than what they actually SEE HAPPENING. The market doesn't give a crappe what you think it should be doing--it's going to do what it wants for as long as it wants to do it, whether it SEEMS logical to you or not. But people seem to have this idea that they must act BEFORE the market makes a move, as if they'll miss out if they don't. The fact is, regardless of your trading time frame (whether long-term or short-term), you will typically have plenty of time to catch the "meat" of the move if you wait to see the market play its hand first. Now, deciphering what you're seeing is often not an easy task either (and a subject for another day), but it's much better than simply "guessing" or "predicting."
I would also like to add that most people trade/invest with emotions.
You need to be a cold hearted machine when investing.
basically do opposite of what your natural instinct is. For example, buying stocks because they are way up. buying a house because it can only go higher.
I would argue that stocks are up because of inflation and mostly inflation. the real rate of inflation is closer to 6-10%/yr.
If this is the case and stocks return 10-12%, take out taxes, what are you left with?
I am an investor in silver bullion right here, and that is just me. I am not advocating anyone else to follow me to the T, but I like silver at this price down here. I also think gold is a good buy.
Gold does will in inflation, and deflation. it doesn't do well in disinflation.
I don't understand the gold or silver markets nearly as well as the stock markets.
But based on what I know, I would be shorting both gold or silver at the moment. Both of these metals are in deep bear markets right now. Silver has declined twice as much as gold.
Investors have been leaving gold and silver and buying up stocks, as far as I can tell. These metals will turn around eventually, but not just yet.
This blog post has a graph showing 10-year returns for the past 100 years. There was only 1 year out of 100 from 1899 to 1999 (1928) where a 10-year investment in the stock market would have generated a negative return.
I don't understand the gold or silver markets nearly as well as the stock markets.
But based on what I know, I would be shorting both gold or silver at the moment. Both of these metals are in deep bear markets right now. Silver has declined twice as much as gold.
Investors have been leaving gold and silver and buying up stocks, as far as I can tell. These metals will turn around eventually, but not just yet.
I am not sure when they will turn or what, the ratio of gold to silver is favorable silver. The dow to gold ratio is favorable gold but rising for the dow.
I own a lot of stock in my 401K, roth IRA and an individual account. I typically try to pick up bullion when it gets low. I view it as real money and insurance of in case crap happens.
The stock portion of my portfolio is going up fast, so I am deploying new money into bullion and will continue to watch and pick up bullion.
It's fine if it keeps going down, I will keep buying it.
We will have corrections along the way, but I believe the S&P will be over 2000 in a few years. The Dow should also be over 20000 in a few years.
If I am going to put on my guessing hat....I would disagree. I think dow and bonds down, commodities up.
I am seeing things that suggest the stock market run up will be ending. many stocks are down, few are pushing the dow and S&P higher. this is an early indicator of the markets getting tired. it sure could go higher, but I don't think it will for years longer. most likely months longer.
I am seeing gold and silver stocks and bullion looking like they are putting in bottoms. I am seeing very bullish chart patterns in these stocks.
I personally think we still have a ways to go with this rally, maybe up to a couple years. I base that on the general expansionary optimism of the business sector. People are in a spending mood. We are only just beginning to forget about the recession that started in 2008. Housing is making a comeback. That will continue to drive spending.
I would not however recommend getting into stocks at this point. You should have done that years ago (2009 ideally). Now the question is when to get out. If the market makes some huge advances I will pull out. If it continues to waddle around in an upward trend, I will stay in for a year ot two probably.
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