Sunday, January 29, 2017

The New Pain Trade

Markets have a tendency to deliver the maximum amount punishment to the most investors possible.  ~ Wall Street Adage

The current pain trade is buying into the current Trump rally, which very few people believe is sustainable.   After all, the bull market is long in the tooth, there is significant uncertainty associated with the current administration, and valuation measures, such as P/E, are at or near all time highs.  So money continues to stay on the sidelines,

However, if the market keeps grinding up, there will be reluctant movement back into the market, after 5%, 10%, 15% or more gains.  It's tough to be in cash as the market moves upward.  Eventually, the return of funds to equities may lead to euphoria, which will correlate with a market top, inflicting more pain on the most recent buyers.

For more on  New Beginnings, check back Saturdays for a new segment.

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

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