Time To Grade The Financial Markets and Yourself – Mike Swanson (06/07/2016)
By Mike Swanson on Wed, 06/07/2016 from: http://wallstreetwindow.com/
With the S&P 500 at 2,100 it’s now time to grade the market and your own performance.
The stock market went up yesterday following the Yellen talk in which she said the economy is doing good, but she can’t raise rates now, because it’s not doing good, but wants to do so in the future.
Expect her to stick now to this line for months on end.
It is now time though to step back and see what is happening not just to the US stock market, but to ALL financial markets so far this year.
Here is an interesting performance chart from Finviz.com showing how everything has performed.
Take a look.
So the S&P 500 is up 4.3% as of this morning year to date while the Nasdaq 100 is red.
Of course it is a basket of soft commodities leading the way this year and silver and gold, with gold up 16.5% year to date, which makes the performance of the S&P 500 look like a total joke.
At the top of this graphic much of what you seeing are big gains that are coming at the start of new bull markets, although I’m skeptical that oil is actually starting a new bull market this year).
But this is where the money is going.
To beat the market you cannot be one of those people that puts all of their money in the US stock market in hopes of making some giant killing, but instead you need to spread out in what is really working and going up for real.
Today the market is gapping up and US stock market bubble bulls are excited, because the S&P 500 is above 2,100 today, but it could dump on them today who knows.
There are people on margin in this market dreaming of a giant stairway to heaven run, because they love to gamble it up.
This year I have been warning of the risks in the stock market as I did last year and I publicly talk about shorting and betting against stocks – and I have some bets against junk POS stocks. In fact I just shorted a new debt buyback disaster stock the other week.
As a result I get angry messages from these bubble bulls, because they hate hearing from someone who is not chasing their favorite market fads and Cramer picks.
One email I got yesterday demanded to know when I will “capitulate” and give up on being cautious on the stock market and start to buy.
He said the S&P 500 is going to go above 2,100 by year end.
He assumed I was somehow losing money.
Well I looked at my account today and I’m 10.66% year to date in my largest account.
This can change tomorrow though and a few weeks ago I was up just over 4% as I had a dip myself with a pullback in many of my long positions (although that was still better than the S&P 500 at that time too).
The important thing is that I’m beating the stock market like crazy so far this year and I have no doubt that I am probably beating this bubble bull too.
So when he makes assumptions in his bubble brain that people who are not all long the US stock market ETF’s and stocks like Facebook and Apple are “missing out” he is totally deluding himself.
I own both long and short positions so am operating like a hedge fund and using the ETF rebalancing strategy I talk about with the bulk of my money.
What the market does today or tomorrow isn’t that important to me (although I think it’s just a dead stock market that will lead to a big drop later this summer).
It’s time to grade the markets and yourself.
Are you beating the S&P 500 this year?
It’s actually not hard to do that, because so many new bull markets are starting outside of it and it hasn’t really done much this year.
Just look at the chart above.
If you are fully invested in lots of stocks and not beating the market that’s not because you cannot pick out stocks, but because most stocks are simply dead now.
Apple is the poster boy for dead stocks, because everyone owns it and just about everyone who bought it in the past 18 months is losing money.
That’s because we are in a nasty market with a lot of problems in it.
What the stock market bubble bull doesn’t understand is that there is more to investing than just buying into the US stock market and hoping that it will go up again like it did in 1999.
To invest properly you need to diversify into a mix of markets and asset classes, because the times of watching the US stock market go up to new highs and beyond month after month are over and will not come back now FOR YEARS.
And if you want to buy individual stocks you need to be buying mining stocks, because that is where the action is now.
And if you still want to just trade the US stock market you need to be able to move in both directions.
Boosting returns through safe diversification and not desperate gambling or “fast money” style plays is what I advocate.
It really isn’t about predicting the future like most people think or talk like it is.
If you never read my last book The Stock Market Bubble Bust of 2015 and Beyond now is a good time to do it, because it lays out a simple money management and asset allocation strategy that anyone can use and is what is enabling me to beat the market this year with little worry.
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