Heinz, sometimes one can be too smart, too knowledgeable, for their own financial health. The typical bear on this thread knows much more about the market, its fundamentals, its imbalances, and its logical outcome, than the average investor. Problem is, the average investor has been indoctrinated that buying and holding is the way to prosper, regardless of economic conditions, of the fed's moves, or of valuations. And today's average investor, with 401's and IRAs, has become a powerful force in the marketplace. I am surprised there were not more outflows over the last couple of months. This tells me that, outside of a total meltdown, we are in for a continued bull run for the next several years, fed by the boomers.
The Fed will have a difficult time justifying further cuts in light of the economic numbers and the upcoming elections. If they continue cutting, a recession is a certainty. If they cease, a recession is only likely, accompanied by further expansion in the equities markets. Either way the bubble continues, it is only a question of how large it gets before liquidity dries up. It may take the remainder of this decade.
Thoughts? |
