You are correct right now. This is a very interesting post -- part rant, part words of wisdom. It was worth a couple of reads. Thanks.
I dont see anything good going on even with corporate profits high as they are and so much money in the banks. Nobody seems to care. It seems things are determined to crash in spite of whatever may be the fact about Apples 100% gain in year over year profits, high corporate profits or anything else. If these things are a factor the market does not care, it is an emotional animal or sees something else than corporate profits at this writing.In the US I agree with you. However, broaden your perspective -- consider a more balanced approach that puts a portion of your money in global stocks. Right now many are scared of Europe, but places where the free market is alive have done very well, and will continue to outshine the heavily regulated and taxed economies. The likes of Roubini and Denniger mouth off constantly about the market being a place where fools put their money and yet they offer no alternative. Gold? Really? Maybe a few years ago. Obastard has just about successfully shut down growth.
Many saw Obama's agenda in 2008 as a big failure. Many went overweight in non-US securities immediately after the election, including me. No, I have not flourished and can retire on a dessert island, but I have been able avoid a portion of losses.
I will report to you that between 1-1-99 and 1-1-11 the DOW went from 7906 to 11891, a whopping 3.189% annual rate of gain. Make your 401K pay on that bubba.
Agreed. But if Bubba had a diversified portfolio, then Bubba probably did better than 3.189%. Diversification mitigates risk, including severe political risk.
I think it will be easy enough to see when things get better and I dont see how it will get fundamentally better until this bastard obastard is gone and we restructure entitlements, taxes, regulation and the size of government... it will be DREADFULLY painful if it happens and WORSE if it doesnt. QE3 may artifically prop things up but this house cant stand forever with just props for support when the foundation is crumbling. We saw the market look for bottom yesterday on the rumor of QE3 but the fundamentals keep falling.
I happen to think that 15 years from now economic historians will state that we were in a depression that began in 2008. Fortunately there is plenty of capital out there. Further this is a government induced depression, that could have simply been the panic of 2008. Once Obama is out and businesses get their freedom back -- another very painful 1.5 to 5.5 years -- we will rebound. Whether or not there is QE3 is immaterial in the longer run. We have a severe fiscal problem, not a monetary problem.
If this nation and economy doesnt recover it wont matter where your money is. If it does recover, and I think it will in time after this administration is gone, I will have saved myself worry thorough the trough by being on the sideline. If a new lower base is established and things calm down and this administration is gone the cash on the sidelines will buy more assets to appreciate.
Well stated. If you are a long term investor you will be fine. If you can, now is the time to save and invest. You will very happy in the future.
I still have some small amount of control over this Bastard Administration and I am going to exercise it. I cant vote with my feet and I cant get the politicians to listen to what I ask them to do so I am already out of the market as my stupid way of sending a message.
My advice is to make your investment decisions based on what is best for you financially (legally, of course). Protesting with your investments, unless you are extremely well heeled, will bite you big time in the long run. Please don't cut off your nose to spite your face.
Things are bad, but remember, free markets have gone through ups and downs far worse than this for over 4000 years. We have the benefit of being able to vote.
How are you feeling about all this today?
I did a little 5 year hind cast study on the DOW this weekend. A buy and hold would net about 1.85% annual rate of return. An investor using 50 day rolling average crossings of the 200 day moving average and brutally applying them would have been in and out of the market three times, would have sat out the period from EOY 2008 until fall of 2009 and still have earned almost a 10% annual rate of return.