Thursday, December 18, 2014

Get in the market and enjoy this ride !

Now twice in the last three months we have had sell offs in the stock market and both times we have not only rallied, but we had ferocious rallies.  What to make of it?  As we have been opining for months this market can not go down as the monetary and fiscal support is just too strong.  We did NOT say the economy is strong, just that economic engineering and political spending is such a support that it is hard to push down this huge asset supporting apparatus built by both the Federal Reserve and Obama.  Begs to question is there anything that could cut the legs out of this market?  

Before we answer that last question, let's pursue something else. For those of you who have been hiding in treasury bonds for years and missed the last 5000 points of the Dow move let me suggest a story I often heard from my father. He told me over and over not to buy a house on the beach as sooner or later a hurricane would take it out. He was right, but during the years one does not have a beach home one is deprived of the joys of owning one. Likewise while many of you hide in bonds and cash you are depriving yourself of the huge money making taking place in the stock ownership.
While waiting for the assumed stock market crash you are losing out on tons of money making.  Yes eventually the downturn will come and yes if you are in the market there will be pain. But honestly no one can predict precisely the date and in our opinion it is years in the future.  When the downturn does come the economic and political moves will predict it so one will have time to then move into safer assets such as the bonds some are invested in now. Add to that bonds are more risky than stocks now due to interest rate risk.

What can bring down this market? The only thing we think that could do so is a geopolitical event of some sort.  Think Iran drops a nuke on Israel, or North Korea attacks the south, or Isis explodes a nuke in some major US city.   Yes they can happen and just like a hurricane can take out your beach house, but if you wait for those as well you lose out on this stock market monetary move.
So make your move into stocks today.  Your ship has come to dock and believe it or not this time you are at the dock.  Like the lady in the Blue Bunny Ice Cream commercial you see on TV, it is good to be rich or working to get rich when you have Obama and Democratic elites who got your back.       

               

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