***Stock Market Perspective 2011 --- Some Things to Think About
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This won't take long, but think about the message and act accordingly.
Never, ever, in the history of the investment world has a major correction in the stock market not been a major buying opportunity --- particularly in Investment Grade Value Stocks (IGVS).
Always, every time and without exception, the general media has predicted the end of the financial world, financial experts have pointed out the remarkable differences from the last correction, and investors everywhere have been encouraged to take their losses and sit on cash or gold until the smoke clears.
Every time, the short sighted fear mongers have been wrong. Not just most of the time mind you --- absolutely all of the time. Similarly, the investing public has always been mesmerized into a take-no-further-action coma by whomever and whatever they listen to.
At the same time, every time, without exception, while the financial markets plummet out of control down the most recent "Double Black Diamond" Wall Street favorite, the few investors who practice Market Cycle Investment Management are collecting IGVSs in their cash rich shopping carts, preparing for the next "Silver Bullet" up the mountain.
Without exception, every time, like sheep being led to slaughter, most investors wait until the market rises within striking distance of old All Time Highs to hop back on the train. The higher it rumbles up the chart's "mountain" formation, the more "all in" their mentality takes them until, once again, the train races back down the mountain to the valley below.
Never, ever, in the investment world has a major rally in the stock market not been a major selling opportunity --- and, interestingly, Investment Grade Value Stocks always seem to lead the way back to the top of the next mountain. Every time except in 1999 - 2001, when there were no IGVSs on the big-rock-candy-mountain the train was climbing.
Always, every time and without exception, the general media has predicted new market highs, financial experts have freight trains full of evidence that this rally will be longer, higher, faster, and more self-sustaining than ever before. Investors everywhere are encouraged to get in the market right now for the ultimate new ride to secure their financial freedom.
And, every time, the media and the financial experts have been wrong. Not just most of the time mind you --- absolutely all of the time. Similarly, the investing public (particularly 401(k) investors) always translates their "paper wealth" into non-refundable retirement entitlements. Always and forever they are "mesmatized" (sic) into a complacent "I'm ready to retire right now with this pile of money --- my money, my entitlement." What could possibly go wrong?
At the same time, every time, without exception, while the financial markets surge out of control in the cable car up to the new summit, the few investors who practice Market Cycle Investment Management are busily reaping reasonable profits, avoiding much-too-high-priced-speculations, growing income, and conserving cash, in preparation for the next giant slalom down the mountain. Schwoosh!
The most glaring recent examples are 1987 - 1988, 2000 - 2001, and 2007 - 2008. Is 2011 - 2012 next? Does it matter? Is this really the one time in the financial history of the planet that there will not be a recovery from a stock market correction? I doubt it, seriously.
... ya follow? Time to get busy.
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