In or Out

It`s that time of the market cycle again, the US stocks that have been leading the world`s economic recovery have been going side-ways for sometime, and they don`t seem to be able to further run.

The blue line is an example of sideway movement. 

At this point, with the Bull market long in the tooth and the Fed`s hike around the corner, history tells us that a big swing is going to take place in the coming months, probably in concert with the aforementioned interest rate rise (nothing too surprising there), but what everybody`s questioning is: will it be a correction or a crash?

Both fundamentals and historical data points just to a correction, there are many indicators still pretty strong, just to name a few, the Bonds yield curve has not inverted (something that signals market crashes) copper price is on the rise (a good sign due to several reasons) and we have on going stock buy backs and mergers in the USA with easing of the monetary policies taking place in Europe, Japan and to a lesser extent, in India and China.

The Japanese Government is pouring more than 3 trillion yen into Japanese stocks with the nikkei on the run, and the Hong Kong index went crazy now that Chinese firms can pour money into it.

So what is going to happen?

We will experience some turmoil, it won`t be a crash, but it can set back the profits you made up until now.
So you do need to update that portfolio of yours, there`s no way around it.

Don`t believe those that tell you "just keep it as is" because they are the same people who told their clients not to sell their funds based on oil and natural resources last year, which still havent`t recovered.

Their rationale is that "it will eventually go up again", the problem is, we had several FANTASTIC opportunities in the past months, you could have gained 20% on those (up from/on top of your previous heights!), instead you lost 50% on those and still waiting for them to go back to normal.

I believe you agree with me that even if they do get back to normal, you would still have been involved in big a waste of time and money by lazy advisers with no information network at their disposal.

"but no, I recovered eventually, so I didn`t lose money" Sadly it is the opposite, as I wrote HERE, unrealized gains are worth far more than you might be lead to believe.

If you move now you can keep your profits, hedge out a few points even during the correction, and take the subsequent rise from the start, the earning potential is HUGE.


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