Recap: Stock market moves like we have seen are perfectly normal after a deep recession.
Review: So, here we go folks. At this point we expect a flat, up then down, then down then up, wild and crazy, volatile market over the next several years.
What to do: The reasons for this are numerous, but in summary, here are the two most salient. One, fiscal and monetary policy of the US government. You have read all about it, but the cause and effect has yet to occur. This includes among other things; inflation, a devalued US dollar, inevitably higher and higher interest rates, and massive amounts of debt that has done nothing to stimulate the economy or job growth – yet, the US taxpayer still has to pay it back with interest. All of this is mostly bad for the stock market. Ok, it is all really bad for the stock market. What then to do? Sell everything and wait till things look better? Cash out of the stock market and buy real estate? What if we are dead wrong and the market goes straight up even more?
What you do is simply look at what asset classes, sectors, and stocks will do the best in the environment we are currently in. For instance, certain individual stocks will greatly outperform the S&P 500 regardless of the above claims. In other words, the old adage – it is a stock pickers market – will hold true over the next 1-4 years.
Two, over regulation and government involvement in business will stall growth, entrepreneurship, and profits. Government does not belong in business, healthcare, or anything other than “governing”; hence, the word government. Again, bad for companies who have Uncle “I have no idea what I am talking about” Sam looking over their shoulder telling them what they can and can’t do and/or can or can’t pay. But, extraordinarily good for companies that don’t have these government imposed constraints. Mrs. Smart College Grad do you want to go work for a government owned, pay restricted, poor morale, terrible product producing company imbedded in fraud, corruption, and stupidity or do you want to go work for a company that is a market leader, highest paying, best products in the world, everyone at the company loves it because their stock options have quadrupled in 4 years, and the prospects for future growth for you within this company is limitless! Gee, I don’t know, that is a really hard decision – ok, I will take the overcooked day old burger, with soggy fries, and flat diet coke, please.
All of this might sound disparaging, negative, or hopeless. Not at all, it just requires you to think more! Don’t give up just because things haven’t gone your way, or your investments aren’t performing like you “hoped”. Get intellectually competitive. Stay on track. Keep doing the things that have been proven to create wealth over a “lifetime” and you will be just fine..
Quote of the Week: “Fat, drunk and stupid is no way to go through life, son.
–Dean Vernon Wormer, Animal House.
Stay Positive!
Think Positive!
Act Positive!
Be Positive!
Clark Bros. is hiring Independent Registered Investment Advisor Representatives – full time, part time, anytime, anywhere. Please visit our web site at www.clarkbrothersinvestments.com for more information.
Jason R. Clark
T: 720 255 5711
jason@clarkbrothersinvestments.com
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