How to Invest During a BULL MARKET

Don’t miss the lesson of the last crash in 2008/9.

If you’ve gotten older since then (if you’re reading this email, you likely did)…

If you are currently seeing record highs in your investment balances (if you aren’t, call me)…

If you have NOT REVIEWED YOUR INVESTMENT MIX WITH YOUR COACH RECENTLY…

Then attend the April 22 event and/or schedule a call today. You may be right where you need to be with your mix of assets. But you may need to make some adjustments, and now is the time to do it.

Part of being able to love the Bear Market is to respect it by not getting too close. You’re older now. You can’t run as fast as you used to.

Don’t test yourself.

Find out how the older and wiser Love the Bear on the 22nd!

 

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3-D, Remy, and Cronies: Weekly Web Gems

3-D Printing Will Change Everything (7:00) . . . Actually, it already is.

The Sky’s Not Falling! . . . A look at failed prophecies from the 1970s might help put today’s hysterics in good perspective.

The Cayman Islands Way (2:50) . . . This nation’s rags-to-richest story came about not through an absence of regulation, as their reputation suggests, but by regulations done right.

Remy’s Happy Tax Day (2:00) . . . Be sure to read the whole letter at the very end.

The Department of Cronyism . . . In case you were worried, it turns out that, yes, our government has one.

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How to Act in a BEAR MARKET?

Let me explain. There is roughly the same number of bull markets as bear markets. Markets go up for a while, then they go down. Some of these animals are large, some are small, but there are bulls and then bears, and then bulls again.

We are currently experiencing the second longest bull market since the 1980s. If it lasts another 30 or so trading days, it will beat that one.

“That one” started in 1982 coming out of a bear market that lasted for the nearly 20 months from Dec 1980 to July 1982. During that time, the S&P 500 lost 21% of its value, dropping from 136.57 to 107.09. Prior to its drop, 136 had been the record high. During the bear market, many investors believed that the market would never again go higher than 130.

Yet, from what turned out to be the low point of 107, it rose almost continuously for more than five years to the value of 320.16 by late September 1987. Then came “Black Monday” – October 19, 1987 – a loss of 20.5% in value . . . in one day. A US equity investor with $1,000,000 in the morning had $795,000 by late afternoon.

Ouch.

But how should the investor have acted? Should stocks have been sold on Tuesday as a result of Monday’s price drop?

NO.

Find out why not. Prepare for the Bear. Join us on April 22.

Fair warning: If you think the investment news media is hyping the current bull market run, mark my words here, just wait for this summer and fall if the market should happen to continue to rise or remain near current highs. This bull market will then become the longest since the run of 1974-1980. It will be bedlam. The media loves irrelevant data like that.

 

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CRASH Ahead? The media have no clue, but they’ll talk it up

I want all of my clients to read this short article, and as you read, ask yourself these questions: How many times does the author contradict himself? What is the author trying to communicate – if anything?

This may be the worst example of the media puking out data I’ve seen all year. We learn exactly nothing of value. The author can’t seem to decide what he thinks the real benefit of this article is going to be. If we are prone to worry about such things, then we have here a pile of data to wring our hands over.

This is how I think the article took shape:

First, the guy found a graph out of the archives that sort of resembles our current market performance. (Really the only similarity is the length of the up-trend – but hey, close enough.)

Second, with the help of an industry expert, he poses the problem: The Bull Market in the 80s lasted 1311 trading days. Our current bull run is 37 days from having lasted the exact same amount of trading days. AMAZING!

Third, he makes a few disclaimers about how patterns rarely repeat themselves and similarities of this nature are normally just considered “market oddities.” (Really? Then why the article?)

Fourth, he claims that “investors” (naming none) are taking this one seriously. And that we won’t have to wait long to find out if there is something behind this one because if history repeats itself, the impending doom is only 37 more trading days away. (Market your calendars and save yourself!)

Finally, the author himself makes the article and the scary graph that inspired it irrelevant:

“That’s not to say a crash is inevitable. Paulsen says that a 10% correction would be more likely than a full blown crash. And stocks might even rise first. And the market is famous for not following any patterns at all.

‘Don’t worry much, however, about another major style 1987 collapse. History doesn’t usually fully repeat,’ Paulsen wrote in his note to clients.

A couple of take-home points:

  1. For anyone who still doubts that the financial news media is not interested in helping you invest, but instead is simply interested in the click of your mouse, look no further! This guy had absolutely nothing of value to say. And investors who might make a decision based on the article, thinking they are listening to experts, will be destroying both their wealth and their peace of mind in the process.
  2. The take-home message about what happened in the 1980s and in the early 1970’s and in 2008/09 is this: Market crashes of various sizes from slight corrections to full-blown bear markets, can happen at any time. The market is no respecter of investors. You cannot predict the next one. And just because we still remember 2008 like it was yesterday doesn’t mean it can’t happen again.

The question is really – are you ready in advance? Whether you are my client now or not, if you are even the slightest bit concerned that you or your portfolio may not be optimized to take advantage of the next bear market, make plans to attend on April 22.

 

 

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Taxes, Bono, and the Big Easy: Weekly Web Gems

Tax credits and the welfare state . . . The tax man cometh, and he’s bringing your wealth to redistribute!

3rd-grade teachers are wrong (3:34) . . . not about everything, maybe, but about recycling definitely.

Capitalism in the Big Easy (3:00) . . . How small business is reducing the criminal activity that followed in the wake of Katrina.

The new TECH boom (5:50) . . . How a faster, more mobile marketplace is bringing with it a resurgence in capitalism.

Bono and faith (2:45) . . . U2′s front man shares his beliefs about the person of Jesus.

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