massive bear market
I don't think that we are in a "bear market" is at all clear. Yes, there has been a bear market dip (much greater than 20% on the Naz), but we may remain in long term upswing. I can't tell right now.
I have been thinking that the traditional waves in technology investing of January effect (big upswing in January), late spring downturn, and summer downturn (through Labor day or October) have been replaced. The waves are still there; perhaps they just occur earlier. People come to expect these movements and they occur earlier than anyone thinks.
Not suggesting it as a reason to market time. I am too dumb to do that successfully. In fact, this thought suggest that perhaps one cannot successfully market time (because everyone else sees the same waves).
But as these tech wrecks occur, I think it may be a reason not to panic. Moreover, we might come to expect tech wrecks to occur in cycles that depart from recent history of January effect, late spring downturn, summer downturn. The cycles are still there, they just occur earlier as everyone expects the same general movements.
For example,
January effect is now replaced by rallies in December of 1998 and then December 1999. I remember January was a so-so month.
Summer stall in July 1999 ended abruptly in early 1/2 of August 1999
Spring downturn (late April 1999--> mid June 1999) may have just moved up (March--> hopefully May 2000) this year.
I am reminded of a series of columns by Mr. Jubak in May-June 1999 suggesting you build cash in June 1999 to buy during the summer downturn, which he forecasted would end after Labor Day. Well, the waves he thought would occur did occur, but they came ashore and washed out at different times than Mr. Jubak forecast. Building cash in June turned out to be a huge mistake as the market took off beginning June 8-10. through about July 15. Then, an abrupt crash definitely occurred, but the downturn was over by August 10. Waiting until Labor Day would have hurt one bad.
saukriver |
