Monday, October 28, 2013

Bullish or Bearish?

At the beginning of 2013, I was expecting the worst for the stock market and continued to plan for the worst in September 2013.  I was wrong.  2013 has been one of the best years for stock market returns,  both in percentage gain and lack of major corrections. 

The bulls are making a case for the market advance as in the article The next 10% correction could be 5 years away.   Of course there are also calls, although fewer, for a market decline as in the article Scary this bearish call points to 40% drop which interview Mark Spitznagel who called the 2000 and 2008 declines, resulting in large gains for the short positions his hedge fund.

At this time, I am still choosing to be very cautious.  I plan to maintain our current investment amounts, continue to reduce our exposure to my company stock options, and take profits in equities in which we are overweight.   I will also return to my strategy of buying every dip, which I didn't do for the debt crisis/shutdown pull back.

For more on Strategies and Plans Ideas, check back every Monday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2013 Achievement Catalyst, LLC

1 comment:

Mario Garcia said...

I think everyone and their mother was expecting the worst at the beginning of 2013. Especially with all this end of the world mysticism going around. I personally thought the market was going to crash;. However, with a little political magic potion at it's best, heavy institutional buying, a large traffic of foreign companies investing and consolidating US corps, US companies moving overseas to minimize taxation while expanding their global territories, companies purchasing their own stock etc; it's created, in my opinion, a huge counterfeit bubble ready to burst at any minute. As you know, history has a high tendency of repeating itself.

As interest rates keep getting lower more money is being printed and more inflation is created while the stocks are booming. More jobs are being lost than are created do to robotic technology, monopoly, internet cloud management; to hire employees overseas. It's like the stock market is not obeying the laws of physics. I do agree with you that we must stay alert and cautious.

I think a good approach to trading now would be to find overly priced market trends that you can short. This way when the bubble burst you are on the profit side of you position. Right know its risky to be staying in the market in a bullish position for a very long time.

In my opinion, trading In and out of overly sold positions and going short instead of long; would be a solid strategy to take profits immediately; as well as avoiding a financial loss of your position. I believe the market it's hovering at it's peak before it makes a huge correction.

Once that happens, investors will then go in and buy at bargain prices. If you are a good trader the rule of thumb is "The Trend Is Your Friend". Weather the market is going up or down you will make money. You just have to develop a precise market pulse awareness to what is going on in today's global economic playing field.

great post

thanks for sharing