Aging bull market gaining believers
- “There’s a lot to like in a market as hated as this one.” — Oliver Renick, stock-market reporter at Bloomberg, writing on 8/15. He said it’s no longer low-volatility or defensive stocks that are leading the market higher. Now it’s technology and financial-services company stocks, whose growth tends to reflect an expanding economy. Read more.
- “The grind higher is neither a mania nor is it narrow.” — Josh Brown, blogger at The Reformed Broker, writing on 8/9 about the market’s growth since February. He said the rally has been driven by stocks across industries and cap-sizes. Read more.
Don’t fear the bear
- “The good news is that history tells us the average bull market lasts 8.5 years with an accumulated return of +458% during that time. The average bear market lasts 1.3 years with an average loss of -41%.” — Financial advisor Rick Bender, telling US News on 8/17 that the end of the bull market will only be a pause in an upward trend. Read more.
- “People think that sitting through a bear market is one of the hardest parts of investing. And while there is definitely truth to that, …sitting through the recovery is no walk in the park either.” – Michael Batnick, blogger at The Irrelevant Investor, writing on 8/10 about the challenge of tuning out market prognosticators who keep waiting for the market to turn downward. Read more.
- “Take yourself out of the equation as much as possible.” — A Wealth of Common Sense blogger Ben Carlson, writing on 8/18. He emphasized the importance of deciding in advance how you will respond to various market scenarios, including prices going up dramatically! Read more.
You may be part of the reason the pros are bullish
- “Individual investors are bearish, but they have been so for a long time. Small investors are really bad when it comes to timing the market. They tend to buy high and sell low, the exact opposite of what should be done. So when they’re bearish, you should be bullish.” — Simon Constable writing for TheStreet.com on 8/22. That view, based on investor sentiment, is only one of six reasons he gives for his bullishness. Read more
Don’t depend too much on your employer
- “Among investors, familiarity doesn’t breed contempt; it breeds comfort. And that can be dangerous.” — Jason Zweig, Wall Street Journal columnist, writing on 7/29 about the dangers of investing too heavily in the stock of your employer. He pointed out that your salary already depends on the health of your employer. Loading up on too much of your company’s stock further concentrates your risk on the success of the company you work for. Read more.
Uncle Sam: payday lender
- “With only 37% of borrowers actually paying down their loans, the federal student-loan program more closely resembles the payday-lending industry than a benevolent source of funds for college.” – Daniel Pianko, managing director of University Ventures, a higher education investment firm, writing on the Opinion page of the Wall Street Journal on 8/16. He says the many income-based repayment and loan-forgiveness programs of the Obama administration have created ballooning balances for borrowers and could lead to a $100 billion loss on the government’s existing pool of loans. Read more