Hill of Hope

Just about now everyone is confused as to which manner the stock market is going to travel - up or down. For the past 3 old age it have got been headed south, but the Wall Street experts have told us that the market never travels down 4 old age in a row so this have to be an up year. But no guarantees.

The old expression is that the stock market climb ups a wall of worry. We watch crisp moves up followed by days, sometimes hebdomads of failing and then another shot to higher prices. From 1982 to 2000 this went on until we absolutely, positively knew it was going to go on forever. The current mentality is you can't lose if you just "hang in there". Mr. Average-stockholder have lost about 50% of his money so far and have chewed his fingernails to the nub. Now what?

I trust you don't need a house to fall on you to recognize we are in a long-term bear market, one that could endure for years. In a bear market the action is exactly opposite what you see in a bull market - crisp diminutions followed by slow agonising mass meetings that don't quite do it back to the former high prices. This is called climbing the Hill of Hope. This is a slippy hill to which you will not do it to the top. Hope is the most expensive word in an investor's lexicon.

The smartest (?) analysts (?) and talking caputs on television go on to state us the market always come ups back - if you dwell long enough. They neglect to state you that every bull market is followed by a bear market of about equal length. This last bull ended after 18 old age and if rhythms repetition we have got 15 more than old age of the downward way to follow. I cognize - "this clip it is different". Let's hope so, but I don't desire to have got my money on hope.

The DOW Industrial Index have been down 3 old age in a row and only once in history have it gone down 4 modern times to newer lows. Did you cognize that the DOW Transportation Index have been down 5 old age straight? Can there possibly be a 6th year? Your reply is as good as mine.

There have recently been some settlement of common finances from 401Ks and IRAs, but the amount is small. It have been reported that there is about 3 trillion (with a T) in common funds. The talking caputs talk of 10 and 20 billion departure the so-called "safe haven". As a percentage of entire assets this is a spit. One of these years not too far in the hereafter (probably this year) investors will suddenly get the thought to head for the door. And they all expression to make it about the same clip like lemmings headed over the cliff.

This volition look like a major underside in the market - and it might be if the P/E ratio can get down to around
10 or less. Until it makes they will still be trying, unsuccessfully, to climb up that Hill of Hope.