Still Irrational But Not Exuberant

A little over a year ago, I posted Irrational But Not Exuberant.   Today, that point of view is still true.   To many people, the market is ready for a correction or even a major decline.   Given all the uncertainty, there are no fundamental reasons for the market to be this high or even go higher.

However, I still see virtually no signs of exuberance.   In fact, I see many signs of anti-exuberance: people in all cash, people in bear market funds, people scare of investing in stocks.   This is still the most unloved bull market ever.

And the market continues to defy logic and grind up slowly to new highs.

Is this time different?   Probably not.  The bull market will end and become a bear market again in the future.   I just don't think it will be before the end of this year.

If this bull market lasts a little over 12 more months, it will be the longest bull market in US history, exceeding the October 1990 to March 2000 bull market of 113 months.   Given the lack of exuberance, there is still a good chance of this bull market lasting that much longer.

For more on Reflections and Musings, check back every Saturday for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

A Terrible, Horrible, No Good, Very Bad Day is Coming

Someday the market will experience a terrific decline.  Mark Farber, aka Dr. Doom, has told me.  Ron Paul has told me.  Doug Kass has told me.   My brother-in-law has told me.  My mother-in-law has told me.

I agree a bear market is definitely coming.  The questions is when.

I believe the earliest will be 2018.  So far, it's looking like that.   I betting on 2600 before a significant decline. We'll see....

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

Copyright © 2017 Achievement Catalyst, LLC

Invest in Winners

"The trend is your friend." ~ Wall Street adage

It seems almost everyone is sure the market is about to decline, correct or crash.   Even perma bull Tom Lee is predicting a lower finish for the S&P in 2017.   People I know have bought 2X inverse bear mutual funds

For me, the best strategy is to stay invested in the winning stocks.    It seems they are hitting new highs on a frequent basis: Amazon, Priceline, Netflix and Facebook are prime examples.   Google, Apple and Tesla are close but not as strong.  

Who knows when the market will turn.   But until it does, I'm not betting against the market and staying invested in the winners.

Disclosure:  We own shares of Amazon, Priceline, Netflix, Facebook, Google, Apple and Tesla.

For more on The Practice of Personal Finance, check back every Wednesday  for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Lack of Economic Boom Keeps Bull Market Going

"Stock markets climb a wall of worry." ~ old adage

I am convinced now that Obama was great for the economy.   Because  businesses did not have confidence in the administration's policy, they under invested and the economy grew at the slowest pace ever after a recession.  Growth was slow and measured. So we never experienced the boom/bust cycle that typically occurs and leads to another recession.

Similarly, the uncertainty with Trump may also be very good for the economy.  The dysfunction exhibited by the Republican party, despite controlling the Executive and Congressional branches is keeping the economy from being overheated.  The economy continues to grind up slowly.  And so does the stock market.

In another eight years, staying invested in the stock market may be the smartest thing anyone ever did.

For more on Reflections and Musings, check back every Saturday for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Looking for Euphoria

The final stage of a bull market is euphoria - when everyone's accounts are going and people are investing as much as they can (and more) into the stock market.   I am very sensitive to the stage of euphoria since I retired in 07 and planned on the market going up for another 10 years. Instead the market crashed the next year.  Having survive a big downturn in our first year of retirement and clawing back the over 10 years has made me exceptionally cautious.

Here are the signs of euphoria that I am watching for:

• Everyone is talking about the stock market.   Not.   All my spouses relatives, who were all made money as speculators in the dotcom boom, have no interest in stocks anymore.   At a neighborhood cookout, I couldn't even get people who are in the business to have any interest in talking about stocks.  The only hint I have is a neighbor telling me she has been "watching" NVDA.
• All stocks are rising.  Not.  There are still a large number of stocks declining and many stocks that have fallen previously are still near their 52 week low.
• There are no more bears.  Not.  I still see a number of bears and significant bearish sentiment.   I know one person that has sold all his equities and has invested in a 2X bear fund.  When there are no more bears, it's a sure sign that euphoria is near or happening.
• FOMO - Fear Of Missing Out. Maybe. People start chasing high flying stocks assuming the stock price will go higher.  Stocks advance in the double digits on a frequent basis due to buyers chasing the stock.   A few stocks have advanced significantly this year and those are being chased, but not the majority of stocks.

As I see it, euphoria may be coming, but it's not here yet.  So I will continue to maintain our investments and taking some profits by trimming positions as the market keeps advancing.

For more on Reaping the Rewards, check back every Friday for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Procrastination Pays Off

For years, I've been considering adding a few more large stepping rocks to widen a path through our back yard wooded area.   But I never got around to it.

This spring, we decided to get rid of all the ivy in our wooded area, which I did over 6 weeks, a 5X5  square foot patch at a time.  To my surprise, I found 40-50 rocks that were 50-150 pounds in a few ivy patches.   Some were covered by years of dirt under the ivy. About half of them were the right dimension for stepping stones.  So I recycled them to the path.    Also created a couple of new paths.

So these rocks would have cost me $15 to $40 each, but I got them for a few hours of digging (and free exercise hauling stones).   Fortunately, I'm a retired guy and my time is cheap.   So procrastination paid off.

For more on Reaping the Rewards, check back every Friday for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Staying Invested

Despite all the negativity, I'm staying invested in the stock market.  Here are my reasons:

• All my spouse's relatives think the stock market will crash soon.   For example, my brother-in-law has purchased a 2X bear fund.  Their position is based on politics.  They all voted against Trump and are ignoring that the economy is improving.
  
• Trump has more teflon than Reagan and Obama.   Despite all the Russia issues for Trump, the stock market keeps going up.
  
• It's what George Costanza would do.

Sure the market will eventually fall.  But I think it will happen later (after the end of the year) versus sooner.  We'll see ...

For more on  The Practice of Personal Finance, check back every Wednesday for a new segment.

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

Copyright © 2017 Achievement Catalyst, LLC

Resisting My Normal Investment Strategy

I normally prefer to buy stocks of good companies that have been beaten down from their high and hold them until the stock price recovers.  However, this strategy has done very poorly for the past two years.  During this time, stocks I have purchased continued to go lower, and then didn't rebound.

So I have broadened my strategies for now.  While I continue to hold my beaten down stocks, I am now buying the stocks that have been going up, i.e. the momentum stocks.  This goes against my nature since I am buying these stocks near their highs, and expecting (hoping) them to go higher.  

For now, this additional strategy is working well.  In a little over a month, some of my buys are up
as much as 20%.   I plan to use this strategy short term and ride the rally in the momentum stocks.  I will consciously take profits on the way up, since I expect the market may correct sooner than later.

Hopefully, this strategy will yield a net gain when (not if) the market experiences a correction.

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

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

Copyright © 2017 Achievement Catalyst, LLC

A Stock Market Nightmare

"Markets can stay irrational longer than you can be solvent." ~ Wall Street adage attributed to John Maynard Keynes

This market should be lower, much lower.   Why?   Trump won.   Trump has not and cannot delivered on his campaign promises. Trump will soon make several big mistakes that will crash the market.

This should have been easiest short in stock market history.   Except it wasn't.

Those that have sold out and shorted the market have not only missed out on a great rally, but have lost money in addition.

Of course, they will be right eventually.  There will be a bear market in the future.  However, if the bull market last a few more years, it will be a hollow victory since they may not be solvent by then.

For now, I remain cautious, with an optimistic bias.  I continue to look for purchasing opportunities for stocks in my buy list and sell tradable position when profitable.  I will also continue to keep a significant level of cash in case there is a major decline.

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

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

Copyright © 2017 Achievement Catalyst, LLC

The New "Retirement"

For me, retirement was working enough years to get certain benefits from my company, e.g. company  retiree health insurance, and  company provided retirement funds.

However, when I hear about current bloggers retiring early, it is one of the following situations:

• One spouse quits working, while the other spouse keeps working.  The spouse that quit has "retired" in their 30s and 40s,  Often the spouse who quit working earns supplemental income from blogging.
• An individual or both spouses quit working in the corporate world because the income from gig jobs and blogging is sufficient to cover expenses.  In some cases, the income exceeds their previous corporate job.

To me, these options did not seem to be "retirement."    I grew up in a single income family, because my mom stayed home to care for the kids.   We didn't call that retirement since she didn't receive any retiree benefits from her last place of employment.   Similarly, finding a better way to earn income, e.g. blogging, was "getting a better job by being self employed."

Here's What Millennials Are Prioritizing Instead of Retirement provide me some insight as to what is the new retirement.    It seems young adults goals are to have the financial freedom and flexibility to have their desired lifestyle.   As a colleague once said, "work to live instead of live to work."

So maybe the "new retirement" is achieving work life balance and continuing to work well into their 70s and longer.   We'll see how that works 30 to 40 years from now.

For me, I still prefer the "old retirement" model, but maybe that's no longer achievable and therefore not relevant to the current generation.

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

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

Copyright © 2017 Achievement Catalyst, LLC