With the way the markets are behaving you would think that the economy is expanding at a rapid pace and unemployment is low. Well unfortunately the latter is not happening yet. If you try to tie the markets and the economy together it doesn’t make sense, does it? So why the strength and resiliency you ask? My takeaway from the September rally and the most recent overall market strength continues to be the low interest rate environment we find ourselves in and the constant flow of global liquidity being injected into the system. Now couple that with the anticipation of the mid-term elections and you have the recipe for a respectable rally.
For me though it does not feel like a real rally. Maybe the reasons for my feelings are the constant negative headlines that the media is obsessed with delivering to us? Or the coming out of the closet of the “high frequency” computerized trading systems which are seemingly making the markets even more lopsided for the retail investor? Or could it be that I need to see some real business leadership out of Washington? I don’t know what it is yet, but what I do know is when I hear stories that individual investors are piling out of the stock market for the above reasons or the like, that’s usually when the big boys are buying their stock.
I do the best I can to filter out the bias news and the incessant negative headlines that are being fed to us daily. Grant it a lot of the business and economic news is very real and needs to be considered accordingly, but not to the point where it freezes you. Now more than ever patience and prudence is required when navigating the market waters and once the right opportunity presents itself you must have the fortitude to act.
Have a great weekend 🙂