Have you heard about “The Looming 2014 Stock Market Crash?” Turns out, “there is one signal that could spell complete disaster for the market.” And this system “has detected 22 out of 24 major market tops and bottoms since 1970.” While “most investors retirement accounts are getting decimated, you could be on the right side of this massive move.” And oh, by the way, “the next signal could come at ANY TIME!” Click here to find out more!
Yes, I get e-mails like this too. Occasionally, I even click it. What a mistake. These e-mails from someone you don’t know and you’ve never met (and never will) are designed to do one thing and one thing only- separate you and your money. Through deceptions, half-truths, and fear tactics, any number of websites are more than happy to take your money and run. I can recall about a year ago a client forwarding me one of these e-mails, along with a note saying they had read though the information and were very scared. Sleepless nights had convinced them to sell down their portfolio, stuff cash under their mattress, buy gold (or farmland) and build a fall-out shelter. Yet, here we are a year later and the market is tickling new all-time highs almost daily.
Think about it: what this e-mail doesn’t say is how many times this system detected absolutely nothing. And while we don’t doubt the market will some day go down again, it is difficult to predict when. Of course, I spend hours every day reading about the market, following my own set of indicators and rebalancing and making minor adjustments to portfolios. But to date, I don’t see anything that makes me overly concerned an economic collapse is imminent and even if I did, I wouldn’t use a series of wild and outlandish claims to try and scare anyone into making a rash decision. And you shouldn’t be listening to anyone who would.
The bull market continues to unfold as summer arrives. Investors everywhere feel the Central Banks of the world have their backs, confidence is high and volatility is low; few see any risk to the markets. July will see 2nd quarter earnings season begin. Corporate earnings are expected to grow 5.2% with revenues increasing 2.8%. FactSet notes the telecommunications sector is the only S&P 500 sector (there are ten sectors in all) that is trading at a P/E (Price to earnings per share) discount to its five and ten year averages. Indeed, as the market continues to climb ever higher, it’s only fair to begin to wonder how high it can go? We can’t help but feel a tingle of caution in our bones, yet cannot see any good reason to lighten up (besides our emotions), so we continue to hold steady and maintain a balanced approach.
Stock Market Lesson
When investing, it’s important to always be comfortable with what you’re doing (or we’re doing for you). For some, flying by the seat of their pants daytrading penny stocks is okay. For others, buying a bond index fund is risk enough. Investment styles are often (but not always) an extension of your personality. Whatever your investments are, you need to be able to sleep at night.
A New Yorker could eat out every night of their life and never eat at the same restaurant twice. (I couldn’t believe it myself either!)
Calendar of Events
On Saturday, June 21, I (since I couldn’t find anyone to join me!) “busted” some yardwork for the Boulder County Care Connect Yardbusters program. Boulder County Care Connect helps the elderly and disabled in Boulder county. Please join us next time on the morning of July 19 when we take care of some general yard maintenance like mowing, raking, weeding and trimming for the elderly and disabled in Boulder county. E-mail me if you’re interested in joining the Flatirons team.
Did You Know?
Steve speaks to groups about any number of financial planning topics- from retirement and social security, to life insurance and college education planning. If you would like to have Steve speak to your group, please get in touch with us here.
Have a great July,
Steve Zakelj, CFP®
Flatirons Asset Management