Monday, April 14, 2014

The Current Problem - 04/14/2014

The Current Problem 

As the saying goes... "the market climbs a wall of worry and slides down the slope of hope." 

Let's break that down.

When investors are worried about the market, they sell stocks. That keeps happening until it compresses prices to a point that makes them attractive once again. But before everyone sees their merit, they begin to rise...thus climbing that wall of worry.

On the other hand, when there is too much elation in the market, then stocks get ahead of themselves (like going up 32% in 2013 when earnings only grew 5%) . So even while folks are still exuberant about the market outlook it can take a tumble to reach a happier medium in terms of valuation. That is the case now.

Plain and simple, the economy is still expanding with no serious sign of a recession on the horizon. So the long term bull market is still in place and the next upward leg will commence once enough investors are scared out of stocks and we can climb that wall of worry once again.

Don't be one of those weak hands who is thrown off the bull before the ride is over.

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•   Realistic Retirement Budgeting 

•   Excellent Dividend ETFs for Growth and Income

Steve Reitmeister ( aka Reity...pronounced "Righty" )
Executive Vice President
Zacks Investment Research
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