Sixth Year of a Seven Year Cycle
US equities are in a curious place. Since August 2011, the market has gone straight up and nearly doubled in this three-and-a-half year period. Throughout this period, there really were very few pullbacks to speak of, as the market climbs this wall of worry without a care.
Careful examination of the cycle reveals that the 2009 bottom in equities means this cycle should end in 2016. Now I know investing from this macro stance can seem simplistic, but the over-analysis we get from brokers, TV and financial blogs seems to take us away from what we know is true - markets trade in cycles - and they certainly do not go up forever.
Why I Don't Give Investment Advice
I stay away from giving investment advice, because I learned from the first broker I met that many really do not care what happens to the client's money. This unscrupulous commodity broker would tell a client that he thought the market would rise, and he would tell another client that the market would fall. Either way, he would keep one of the clients happy and considered this a victory. To me, it seemed like such a contradiction that the broker only cared about his commission.
I realized I was untrainable in that world, and went on to simply make markets and provide liquidity. This seemed like a much easier way to provide a service to the marketplace, and make money. If you have someone managing your money for you, take the time to understand the commissions - brokers make a living from the amount of money they manage, and in the 2015 world of equities, there is an ETF to cover any market you choose. Also, I learned from my Mom about buy and hold. equities over time have returned more than any other asset class - they enable retirement and create security for you and your family's future. Real estate is the only other area where you can create security for yourself - nearly everything else is speculative.
US equities are on a six year run, and you should be prepared to sit through a pullback in stocks if you adhere to the buy and hold strategy. But I suggest you stop listening to anyone else when it comes to investing, and start making decisions that fit your own goals - the days of limos and high commission brokerage houses are over - we are in the age of information and self reliance.
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