Posted on 03/25/2015 11:38:02 AM PDT by george76
I think about myself as like an ocean liner that’s been going full speed for a long distance, and the captain pulls the throttle back all the way to ‘stop,’ but the ship doesn’t stop immediately, does it? It has its own momentum and it keeps on going, and I’m very flattered that people are still finding me useful.” — Leonard Nimoy.
There are many different factors that can influence markets, but among the most powerful is momentum for the simple reason that people find comfort and safety in doing what everyone else is doing.
Investing professionals are well aware of this, so it isn’t uncommon to see financial advisers selling investment products based on recent performance, portfolio managers doing closet indexing, and equity analysts staying away from sticking their neck out with recommendations.
All these actions have a tremendous influence on equity market momentum.
...
It reminds me quite a bit of those nature videos where you see a flock of birds flying together in amazing unity. It’s beautiful to watch, but I still wonder what causes a change in direction or momentum either way.
That said, it only takes the actions of a few to change the direction of many, which is why it’s important to stay humble, keep a close eye on the market and proactively hedge against potential major shifts.
There is a lot of momentum in today’s market environment, but a lot of it seems to be due to near-zero interest rates forcing investors out of bonds and into stocks, and companies increasing dividends and buying back trillions of dollars worth of their stock.
...
Retail investors capitulating and piling into U.S. stocks.
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A deceleration in earnings growth.
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A softening IPO market.
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An over-reliance on the Fed
(Excerpt) Read more at business.financialpost.com ...
I agree, the stock market could go down. However, it might go up as well, you never know....
It will do that.
The author heads in the right direction
(e.g., over-reliance on the Fed),
but then reveals his own bias
(”lets hope the Fed stays ahead....”)
Elitists are genetically incapable
of understanding the truth, which is that
markets can’t be manipulated into
doing good things.
They are free and unfettered creatures
of nature that can only be diminished
by human control.
I confidently predict that the markets will fluctuate.
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