Wednesday, October 22, 2014 11:51pm
North Adams, MA now: 48 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
SIGN IN | REGISTER NOW   

Home About Archives RSS Feed
@theMarket: Is Everybody Happy?
By Bill Schmick On: 01:56PM / Saturday March 16, 2013
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0

The Dow made a new record high every day this week, except Friday. The S&P 500 Index came within a hair's breath of its historical high as well. Most world indexes are doing the same thing. The consensus is that the markets are going higher — Uh oh.

I guess I should feel vindicated for remaining bullish over the last year or so in the face of all those "what will go wrong" scenarios. However, when just about everyone is bullish I start to get concerned. It's the contrarian in me.

There are a handful of readers I use as a contrary indicator. You know the type. When the markets are at a bottom, they want to go to cash. At market tops they usually call up asking if they are too conservative no matter how much they are making. I received several emailss this week from those kind of readers who were asking about getting more aggressive. Uh, oh.

When I compare the U.S. equity market with its counterparts in 30 other nations, I find that our market is the most overbought of any of them, although Japan comes in a close second. Uh, oh.

 But markets can stay overbought for a long time, so I wouldn't go out and try to short stocks right here, nor would I take profits.

So far, every dip in our markets has been met with renewed buying. The most popular explanation for this seemingly insatiable demand for stocks is that U.S. Treasury bond investors, tired of receiving record low interest payments from their holdings, are finally selling their positions and are seeking greater returns by investing in stocks. It is called "The Great Rotation," but the evidence is more hearsay than fact.

The financial media is doing their part to stoke the buying frenzy. They are having a field day citing financial statistics of this record or that. The Dow, for example, has been up 10 days in a row. That has only happened four times since WWII. An interesting statistic, but worthless when it comes to your portfolio or what happens next.

For those who feel compelled to put more money in the markets at this late date, do so with some financial acumen. Don't buy on the up days or buy everything at once. Average in and try to keep your emotions out of it. Remember, investors' greatest enemies are fear and greed.

Another suggestion would be to look for the laggards using the "rising tide lifts all boats" theory. If you truly believe that the global markets are going to continue to rise (with no breaks) in the foreseeable future than buy those stocks, sectors and country indexes that have lagged the U.S. market.

And for those who have stayed the course and are fully invested, remain so. However, I suspect that as March advances the rate of gains will slow. Once the S&P 500 Index breaks out to new highs, the markets will become a battleground of those buying the dips versus those wanting to take profits. That is not a game that most of us will be willing to play. I know that I would rather sit with what I have and watch the battle play out. Either way, I don't see much downside risk for long-term investors. Overall, I am still looking for double-digit gains in the markets this year.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.



0 Comments
     
News Headlines
Pittsfield Expecting Heavy Usage at Renovated Common
Williamstown Students Celebrate Power of Words
Former Senator Bill Bradley Shares Insights at Williams
Cheshire Town Cleanup Deemed Success
North Adams License Commission OKs Transfer to V&V
Pittsfield Granted $4.5 Million To Finish North Street Reconstruction
Clarksburg Awarded $920K MassWorks Grant for Road
PEDA: Springfield Rail Car Contract Benefits Berkshires
Williams Chapin Library Seeking Volunteers
Berkshire Health Systems Investing $6M in North County
Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (148)
Independent Investor (200)
Archives:
October 2014 (6)
October 2013 (2)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
May 2014 (9)
April 2014 (8)
March 2014 (6)
February 2014 (6)
January 2014 (7)
December 2013 (8)
November 2013 (7)
Tags:
Economy Stocks Fiscal Cliff Debt Rally Crisis Markets Recession Greece Commodities Jobs Selloff Bailout Metals Energy Deficit Stock Market Congress Stimulus Japan Banks Debt Ceiling Pullback Housing Election Europe Fed Euro Federal Reserve Oil Europe Currency Taxes Interest Rates Retirement
Popular Entries:
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Don't Fight the Fed
The Independent Investor: Does Cash Mean Currencies?
@theMarket: QE II Supports the Markets
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
@theMarket: So far, So Good
The Independent Investor: OPEC's Oil Ploy
@theMarket: Are We There Yet?
The Independent Investor: Why Is This Recovery Different?
@theMarket: October Starts Off on High Note
The Independent Investor: Money & Divorce — What You Should Know
@theMarket: Wash, Rinse and Repeat
The Independent Investor: Is Wall Street Responsible for Climate Change?
@theMarket: Waiting on the Fed
The Independent Investor: The United States of Scotland?


View All
Boys and Girls Cross Country
Boys and Girls Cross Country was held at Windsor Lake on...
Western Mass Golf
Four Berkshire County golfers qualified for the state...
Football: Franklin Tech vs...
McCann Tech holds on for the win Saturday afternoon. McCann...
Colegrove Park Elementary...
Mayor Richard Alcombright and the City Council were updated...
Boys and Girls Cross Country
Berkshire Chamber Greylock
Boys and Girls Cross Country
The Lenox boys and girls teams both cleaned up on Senior...
Volleyball: St. Joe s vs...
Taconic takes 3 from St. Joseph Tuesday night.
Ramblefest 2014
Adams residents enjoyed entertainment, food, and locally...
Girls Soccer: Hoosac Valley...
The Wahconah girls soccer team on Monday advanced to an...
Berkshire County Classic Golf
Francois Benistand, an exchange student from the south of...
Indashio Fashion Show
Fashion designer Indashio holds his second FAME Festival in...
Football: Pittsfield vs...
Senior quarterback Nick Clayton marched his team 80 yards...
Football: Lee vs Drury
FINAL: Lee Wildcats beat Drury 24 -14.
Football: Taconic vs Hoosac...
FINAL: Hoosac Valley 51-14 over Taconic.
Soccer: Mount Greylock vs...
Eric Hirsch scored twice, and Taylor Carlough played strong...
Boys and Girls Cross Country
Boys and Girls Cross Country was held at Windsor Lake on...
Western Mass Golf
Four Berkshire County golfers qualified for the state...
Football: Franklin Tech vs...
McCann Tech holds on for the win Saturday afternoon. McCann...
Colegrove Park Elementary...
Mayor Richard Alcombright and the City Council were updated...
Boys and Girls Cross Country
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings
Advertise | Recommend This Page | Help Contact Us | Privacy Policy| User Agreement
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2000 Boxcar Media LLC - All rights reserved