A Whacky Whipsaw Week
Nothing goes straight up; nothing goes straight down. The downward pressure in the stock market burst the damn on August 24th, followed by further downward moves leading up to the Fed announcement that - mirabile dictu! - they were not going to raise rates after all. After plummeting over 200 points, stock prices dramatically turned around finishing up over 200, a stunning 400 point reversal. Add to this that the reversal was accompanied by rising volume and - voila! - the shorts, complacently sitting on recent gains, were suddenly, violently, wickedly squeezed. And so the script was written and the scene was set for the stock market equivalent of Teddy Roosevelt charging up San Juan Hill. As Teddy might say, "Bully!" for the bulls.
And so this week, following the script, became one great whipsaw, turning the tide from bear to bull - or so it might appear. We say "appear" because we're more likely watching an installment of "Bear Market Rally" rather than "The Bull Rides On."
What do you think? Your answer will determine whether you commence buying "bargains" or sit with your current allocation. And, yes, some of you will believe that bargains must be scooped up while they lie ready for the scooping, while others will scoff at the notion that we've seen THE bottom, rather than a bottom.
For those of you who've battened down the hatches, it's time to retire to your sanctuary and occupy your mind with other thoughts besides how much money you're losing - at least temporarily - as markets soar. Better to busy your idle hands and fevered brains with some project having nothing to do with markets or investing. Or perhaps you pick up that book that you set aside while you were battening those hatches. Resume reading, rather than wracking your brain with thoughts of, "Oh why did I buy those hedges so early," or, "Why didn't I just go to cash in January instead of wasting all that time and money trying to concoct an allocation to anticipate and insulate myself from the insane machinations of the Fed," or some other anxious variation.
Relax your time will come.
The fact is, far as we can tell, there hasn't been a year like this one (so far) since 1981 - the last time all assets went down. Yes, even with this stock turnabout, stocks are down for the year, along with everything - and we mean everything - else. And once you recognize this, you'll likely see that the best one can expect at this point in time is to be fortunate enough to be numbered amongst that class of investor who lose the least when all is said and done. While you would certainly have preferred counting your winnings at year-end, you'll rather be content to count your blessings.
And so this week, following the script, became one great whipsaw, turning the tide from bear to bull - or so it might appear. We say "appear" because we're more likely watching an installment of "Bear Market Rally" rather than "The Bull Rides On."
What do you think? Your answer will determine whether you commence buying "bargains" or sit with your current allocation. And, yes, some of you will believe that bargains must be scooped up while they lie ready for the scooping, while others will scoff at the notion that we've seen THE bottom, rather than a bottom.
For those of you who've battened down the hatches, it's time to retire to your sanctuary and occupy your mind with other thoughts besides how much money you're losing - at least temporarily - as markets soar. Better to busy your idle hands and fevered brains with some project having nothing to do with markets or investing. Or perhaps you pick up that book that you set aside while you were battening those hatches. Resume reading, rather than wracking your brain with thoughts of, "Oh why did I buy those hedges so early," or, "Why didn't I just go to cash in January instead of wasting all that time and money trying to concoct an allocation to anticipate and insulate myself from the insane machinations of the Fed," or some other anxious variation.
Relax your time will come.
The fact is, far as we can tell, there hasn't been a year like this one (so far) since 1981 - the last time all assets went down. Yes, even with this stock turnabout, stocks are down for the year, along with everything - and we mean everything - else. And once you recognize this, you'll likely see that the best one can expect at this point in time is to be fortunate enough to be numbered amongst that class of investor who lose the least when all is said and done. While you would certainly have preferred counting your winnings at year-end, you'll rather be content to count your blessings.
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