I don't entirely know what to make of this article. If you are already a long term investor you know you can live without the money you have invested in case the market goes down like it did in 2008 and recover. What we did is sell low and buy low which allowed us to diversify more easily during those times to a much more diverse portfolio. However, if you need your capital in the next 5 years to invest in a business or home maybe thinking about selling might be useful to you. However, if you are a long term investor you have already planned for the market to go either up or down so you are willing to wait for it to recover once again if it goes down. It is only a problem if you need your capital somewhere else in any 5 or 10 year period. Otherwise it is not a problem.
Remember, if you sell when you don't have to you're going to get killed by Capital Gains taxes on top of whatever losses you sustain. So, you need to be ready for literally any occurrence to be a successful long term investor. You have to be ready to gain a lot or lose a lot in the short and long term knowing historically the market has always recovered in the past. And often after recovering it greatly progresses forwards into higher and higher territory like it now has since 2008. Also, most of the recovery in the U.S. has been in the stock market and not in property values. But, volatility is a problem that everyone has to find a way to manage if they are going to invest in the stock market.
Begin quote:
Sun, Jun 22, 2014, 1:22AM EDT - US Markets are closed
It's Time To Bail On The Stock Market When Two Of Bob Farrell's Investing Rules Meet
By Mamta Badkar
June 20, 2014 7:10 PM
Its Time To Bail On The Stock Market When Two Of Bob Farrell's Investing Rules Meet (Gluskin Sheff)
We're not at the market top yet according to David Rosenberg at Gluskin Sheff. Citing legendary Merrill Lynch strategist Bob Farrell, Rosenberg argues that this is because "public participation has yet to reach levels that typifies the final blow-off an equity bull market. ...We have yet to see Bob Farrell's Rule #5 (the public buys most at the peak and least at the bottom)." But how do you really know when you have arrived at the "aha moment" that signals that it is time to exit the stock market?
"Go back to each cycle and you will see that each fundamental peak in the S&P 500 actually represented a 'failed' peak," he writes. "In other words, the market doest a 'double top' at the highs. It hits a first peak, corrects mildly from it as the proverbial 'smart money' takes profits, and then makes its way to a new high as the last gasp moves up takes hold (generally driven by those who missed out on the bull run and end up capitulating right at the wrong time)."
"Now at that first peak, the momentum is so strong that typically the S&P 500 is up 11% on average over a 30-day period. So the actual classic 'melt up' everyone talks about is the first peak. This tends to stir up a frenzy that pulls the momentum crowd and many neophytes into the market hook, line, and sinker. A mini-correction then follows and the brokers typically tell their clients not to miss the boat again — but you know the gig is up if the market makes a new high and does so on weak breadth (lower participation as measured by the NYSE 52-week high list) and Bob Farrell's rule #7 coincides with fulfillment of that rule #5 (rule #7 goes like this: markets are strongest when they are broad, and weakest when they narrow to a handful of blue-chip names)."
FINRA To Review Its Guidelines After Criticism From The SEC (The Wall Street Journal)
The Financial Industry Regulatory Authority (FINRA) is considering tougher penalties for violations by Wall Street executives, reports Jean Eaglesham at the Wall Street Journal. This comes after a Securities and Exchange Commission (SEC) commissioner, Kara Stein, said FINRA's disciplinary actions were "too often financially insignificant for the wrongdoers." He suggested that FINRA update their sanctions. Susan Axelrod, Finra's executive vice president told the WSJ that they shouldn't just be judged by the size of the fines. She also said that they would take another look at their guidelines and ensure that their penalties would be "meaningful and will have an impact."
Investors Looking To Capitalize On Emerging Market Consumer Spending Should Start With Refrigerators (AllianceBernstein Blog)
The refrigerators of emerging market consumers act as a good investing guide for those looking to capitalize on emerging market consumer spending, according to Tassos Stassopoulous at AllianceBernstein Blog. Kitchens he thinks offer a more useful guide than income and assets. Certain measures look at certain items in a home to understand socio-economic status. "So a person with a laptop, TV, mobile phone and stereo could be classified as rich. Yet in our field research, we’ve met people in countries like Ghana whose ramshackle homes are full of electronic devices but who are quite obviously poor," he writes.
"In working-class homes, the
fridge is used mainly for efficiency items (Display). It includes basic
foods such as eggs, fruits and vegetables and some pre-cooked food.
Middle-class fridges stock more indulgences, from alcoholic beverages to
chocolate and cheese. And for affluent households, health is a primary
concern. So expect to find foods like low-fat yogurt or 100% fruit
juices."
"Our research suggests that China is in the indulgence phase. So
companies that make products like beer, butter and chocolates should
benefit from rising incomes. Indian families are still buying fridges,
then filling them with efficiency items like milk, yogurt and ready-made
sauces. Brazil has already shifted toward health mode, which should see
higher-end food producers draw more spending."
The Demand For Digital Interaction Between Wealth Managers And Clients Is Rising Everywhere (Capegemini/RBC Wealth Management)
While firms continue to focus on
in person meeting with their high net worth (HNWI) clients, they're
increasingly open to interacting online as well. 57% of HNWIs conduct
all or most of their relationship with wealth managers online. Moreover,
64.2% say the expect to have a digital wealth management relationship
in five years.
Capegemini/RBC Capital
end quote from:
http://finance.yahoo.com/news/time-bail-stock-market-two-231005990.html
end quote from:
http://finance.yahoo.com/news/time-bail-stock-market-two-231005990.html
No comments:
Post a Comment