January 6, 2018

Fear and Gain

Source: Phobiawiki

If you've been avoiding the financial markets or investing in risky assets because "that's the only thing you can make money on these days", I hope you take this post to heart.

Should we be "Terrified" as the Dow breaks 25,000?


The answer, I believe right now is No. Not yet. Based on what I'm seeing, not investing now would be a mistake. I can't say what all of 2018 will be like, but what I do know is that Dow Theory has been screaming "buy" for over a year.

 If you haven't been listening, now's the time to start - before it really is too late.

November 8, 2017

Trailing Returns

If you had invested EVERYTHING into the S&P 500, based on Dow Theory analysis and reinvested all of the dividends, you would be sitting on a 21.99% annualized return.

For long term investors, this is spectacular. Most long term investors want an average return of 10%. 12% is considered excellent over the long term. So consider that next year or the year after will see some movement into a bear market (maybe!). When that comes, we will either want to average down as the market bottoms, or we will want to have the guts to cash out proactively, ride the wave down and re-invest when the indexes confirm a reversal in trend.

October 18, 2017

The Best Investment Advice of 2017

The best investment advice of 2017 didn't come from a newsletter, the financial times, CNN, or MSN money. It came to you right here:Stay invested in the broad markets. They will keep hitting new highs until something materially changes.

We can maybe expect some profit taking as things get overbought, but both indexes have confirmed the primary trend as UP. Until this changes, the primary long term trend remains UP.

Take note and invest accordingly.

This is not advice for day traders, but for investors with long time horizons (5 years +).

September 29, 2017

It's still a Bull Market

In my ongoing, unofficial (and good natured on my part ... because it's the only part) rivalry with Casey Research, their constant advice to sell your stocks, invest in gold and bury said gold in the back yard has turned up, well, basically to be the worst investment advice of the last 5 years. Back in 2011, I nearly went "all-in" on gold and gold stocks because of the advice I was seeing in their publications. It would have ruined me.

Now the folks at Casey Research are onto cryptocurrencies.

While cryptos are certainly an interesting avenue for playing cat-and-mouse with your money, getting set up can be complicated, it requires some decent knowledge of how computer security works, and if you are hacked, you lose. There is no Federal insurance to cover those losses.

I've used these digital wallets before. If you forget your password for any reason, you're hooped.

If crypto currencies are really the way of the future, then surely they will become adopted at some point. Besides, the limits set on how much of the currencies can be mined are still somewhat artificial. Change some code and boom, you can mine more.

I know. There is tight security in place to prevent this. But if there's one thing I know - it's human nature. When we start to run out, people will get greedy. They will find ways to skirt the edges, even fraudulently create more. No one is safe from human nature. Not even crypto currencies.

As for the stock market, it's still a money machine. Staying invested is the best thing you could have done TODAY. Not tomorrow or some point in the future. Right now, cryptos are gaining and losing hundreds of dollars a day. As a conservative investor, that makes my stomach churn.

But it brings up another problem we have in the West. We in the west need to start rooting ourselves better in the present moment. We are constantly trying to prophecy about the future, and we create complicated theories, then peddle our theories in books, newsletters, blogs and conferences. But if we have both eyes on the future, we will miss the gift: today.

Notice how I make very few updates on this blog. Why? Because Dow theory works. Yes I do other readings, and I watch the markets. I am a big fan of the Equedia Letter. It can get a bit doomsday-like to be sure, but I have found Ivan Low's insights to be pretty well spot-on over the past 5 years. But I use those other readings and compare them with my own base-level analysis. When they line up as they have over the past 5 years, I become confident in my direction. The Equedia letter represents a divergent opinion to the media machine, but it's an opinion based not on financial theories, but on another thing the West has forgotten: Straight up good journalism.

So what we have now is a confirmed continuation of the bull market which has been in tact since the end of the great recession. It seems shaky because there is a ton of turmoil in the world, and we are more and more aware of turmoil happening all over the place. However, until there are signs of an actual crack in the flow of money - staying invested is the best approach.