Rebuild Your Investment Portfolio TodayWritten by Laura Cotterman
Its time to change your thinking about this beaten-up stock market and get excited about tremendous long-term potential. If you find current market makes you feel like sticking your head in sand and you long for "good old days" of roaring bull market you could be costing yourself a fortune.In reality, 1999 should have been a time for a cautious and skeptical participation because stock prices were simply too high but instead excitement ran high. It seemed like everyone was playing stock market and making a killing. Those days are gone and instead many people are avoiding market when actually this stock market offers alot to get excited about today. Isn't it exciting to acquire shares of companies with solid growth potential for 10 cents on dollar? Well, that is where we are right now. Hundreds of blue-chip stocks are beaten down to multi-year lows and sentiment is as extremely negative as it once was positive. This is time to look for investments that could pay off incredibly 10 or 15 years from now. Don't focus on current market conditions at expense of long-term potential. We should have been incredulous about stock prices in late '90s, and we should be excited about opportunities right now. Almost everyone who owns stocks has been hammered these past two years but that is yesterday's news. There is no good that will come out of dwelling on past. There are three things you need to do right now. #1. Shake off any bad feelings you have about stock market. The most important thing you can do is not to get depressed by fallen investments and stock market decline. If you do, youmay miss long-term opportunities that are unfolding today for both your new investment capital and your holdings. Part of your new thinking will be to understand that market is a marathon although for a while it became a sprint. Forget about gold rush mentality.
| | Geometry of the Stock Market Isn’t So GoodWritten by Charles Payne
The slippery slope of Bear market just hit a 90-degree angle. After coasting at a 45-degree angle, that at times looked like it would plateau, stocks are now moving decidedly down hill and picking up speed. Each bump in road this year has shaken out passengers, but now those thrown from market will face even greater fiscal injury (not to mention mental, as they will be taking lumps that at times will amount to 90% losses). Yet, it will be difficult to hang on. That said, it might be impossible to jump on. The real scary part is that we don’t have a road map for this kind of ride. The last time there was a two-year bear market was from January 1973 to December 1974. The last time there was a three-year bear market was from September 1939 to April 1942. It is fair to say that 95% of us know nothing of two-year bear market, so this is un-chartered territory. Adventure is fun when we get it via books and movies, but stock market investors don’t have fortitude and luck of an Indiana Jones, they close their eyes when danger comes too close. However, now is most important time ever to keep one’s eyes open. It is also time to start looking deep in history books for answers. This isn’t first time stock market has plunged, and it isn’t first bubble that has had to totally deflate.According to published reports from Ned Davis research, average bear market lasts 418-days, and lops off 31% in stock market value. This data is focused exclusively on Dow Jones industrial average. (I’m not sure how NASDAQ figures into historical data. One thing is for sure, that index which worked so hard to shed its moniker as "over counter" market, has been so fractured that it may never recapture former glory. In fact, it seems like each session sees a former NASDAQ-listed company ringing bell at NYSE. It will be very tough to not only rebound, but to be hottest index with many of their brightest stars no longer listed.) Officially, Dow’s bear market began in January of 2000; so it is a long way passed typical time frame. That said, index has been resilient, and at times was only a bear market in name. Despite length of current bear market, it hasn’t satisfied historic norm in terms of value yielded. As it stands now, Dow is off 22% from all-time high. In many ways, index has been a victim of its own success. It is hard to sell off when there is a migration from tech stocks into comfort stocks. As an avid tape watcher, I could see over and over again that index wanted to pull back and investors wanted to take some profits off table. PG, MMM and JNJ were - and are - trading at high-end of their respective valuation ranges. Yet, before re-rotation could build a head of steam, there would be another bomb dropped in tech/biotech land.
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