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That DOW Chart Revisited

The WSJ decides to pay homage to what was most discussed a few months ago. Back then, everyone was rather ‘worried’ that after the 4 year run, we are heading back to a 50% plunge. The bears, who have kept talking about the impending doom, will finally get their chance to say “I Told You this Day will COME!”

Time to Officially Stick a Fork in That 1929 Chart

When you have 2 major bear markets in a short 10 year span, and especially coming out of a once in several decades bear, you tend to fear for your money. You don’t want to live through that pain again. According to the article, they have brokers working for so many years stating they have never get this much inquiries before on this.

Although history may not always repeat, and they do often rhyme but there are also times when they deviate.

The issue for those perma-bears have always been that if you kept at it for 20 years, you are bound to get it right once.

What might be more trustable is more quantifiable measures, and even then you cannot tell much. These measures would state that the average bull market lasted an average of 4 years, and that we are over extending it.

But there are the few bull such as 1982 that lasted for a long time. What if we are in one of those.

If you are a broker, seeing such a chart formation, would you recommend your clients to sell? 

All this seem to indicate that, if you depend on being very right on the timing of market plunges, the end of bear market in order for your wealth building method to be correct, you have got to make sure that your indicators are able to predict that very well. If you don’t you are in a whole lot of trouble.

I have many readers ask me about this. “I would like to buy now but I am afraid about what I should do if the market plunges. Should I wait till then to buy?” If this market gets extended because we never have this kind of de-leveraging in a low interest environment before, what are you going to do about it?

What is your plan?

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