“IAM” is the online name of one of our professional trader friends who writes a respected private newsletter to be shared with just a few friends and colleagues. He lets us share the newsletter with you, our readers. We offer it to you largely unedited, so you can see how professionals think and what they talk about. All views belong to the writer.
Stocks are highly priced at 24.92 times trailing earnings and risk is highly favoring a Fed to make a miss-step that tends to keep monetary policy too loose for too long and tighten too much too quickly. IRVHO, we are in for a volatile and lean return on assets going forward.
Radar read a marketing piece last week. It said to “stay the course.” If you get out of the market then you need to know when to get back in. This is way to simplistic in Radar’s experience.
The problem is there have been 11 Bear markets from the Great Depression to the Great Recession and each one is different. The average decline is approximately 45%. http://www.nbcnews.com/id/37740147/ns/business-stocks_and_economy/t/historic-bear-markets/#.WtIavy7wapo
The average retail customer is way too busy to make these decisions. This only takes into account growing assets for retirement. Volatility, liquidity, taxes and safety repetitively cause submission. The fear of lack of performance often throws people off track as well.
In cases like these, it is best to realize there are risks that force you to account for the performance of your money. These should be taken into account before, not after, this forced reconciliation. Sure you will make decisions along the way that prove inferior. This is to be expected. No one person is always perfectly right about everything all the time.
Retail brokerage deals with risk and valuation by staying the course. It is too complicated to make decisions, just hold your investments long enough and ride the ups and downs and some of your objectives will be met. This is how they market themselves. In hindsight they will always show you a better way. This is okay if you are 25 years old. The older you get the less appealing holding for the long term is.
Radar has an idea. If we haven’t had a bear market in nine years, trailing earnings valuations are at approximately 24.92 times trailing earnings and the Fed is seemingly serious about inflation; is this important enough to have a strategy to address these things? If so, speak to your broker and don’t be afraid to earn less.
Radar offers a free observation of things that show up. It cannot be all inclusive! The observations are done through a brief article that takes about five minutes to read each week. It offers ideas and actions that prudent people may want to consider after seeking advice from their Financial Adviser. Radar reads many articles and keeps a calendar to look forward. People make trades. Radar looks to Value and Earnings from those trades. Approximately 11,000 analysts create the consensus view. Radar offers only an opinion and NO Financial Advice.
As always, please use protective buy and sell stops when trading futures and options.
Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.