6 reasons the bear market has just begun

Discussion in 'Stock Market Forum' started by matt, Sep 4, 2015.

  1. matt

    matt Member

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    1) Stocks are overvalued by almost every metric.
    2) There is currently a lack of revenue and earnings growth for S&P 500 companies.
    3) Virtually the entire global economy is either in, or teetering on, a recession
    4) U.S. manufacturing and GDP is headed south.
    5) Global trade is currently in freefall.
    6) The Fed is promising to no longer support the stock market.
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I'm mostly bottom-up. Some $ in undervalued/rapidly growing/promising stocks; some $ in put options, some in calls; a little here and there in short stock positions; a few bucks in commodities, REITs, etc; and some cash set aside.

    Nobody knows with any certainty what will happen with the broad markets in the near to mid term. It's foolish to try to predict it in my experience, and most of the world's richest and smartest investors agree.
     
  3. baudwalk

    baudwalk Senior Investor

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    Opining the start of a bear market is akin to playing Russian Roulette with all chambers loaded. The fear-mongering Chicken Liitte radio and television ads for free no-sell guarenteed loss prevention seminars drive me crazy. I feel sorry for the retirees who fall pray to those hucksters.

    During my working years dollar-cost averaging and dividend reinvestment paid off in spades. During market dips, I just bought more shares. Timing the market was a crapshoot when I was working fulltime; too little time to pay full attention to the foibles of the markets. Compound interest, baby. Now I collect the dividends and, if I don't need the money, I just let the dividends reinvest.

    Now I pay more attention to sectors, e.g., bailing out of coal and copper a few years ago, and dabble in a few riskier investments that with a small single-digit percentage of my holdings.
     
  4. User911

    User911 Well-Known Member

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    Oddly enough, the nightly news reported tonight that the U.S. unemployment rate is its lowest since April 2008. That's not to say I put much stock in their commentary. Pardon the pun! The unemployment rate can change in a heartbeat, along with everything else if the stock market continues to tank. I remember back in the summer of 2008, it looked like gas was going to go beyond $4 a gallon. By December of 2008, I think it was down to less than $2 bucks.
     
  5. baudwalk

    baudwalk Senior Investor

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    Don't put too much stock in the August unemployment numbers. Typically August numbers are the most often seasonly adjusted values due to skewing with schools and colleges opening.at varying times. Further, I'm not sure if the unemployment statistics reflect the number who drop out of the job hunt altogether.
     
  6. crimsonghost747

    crimsonghost747 Senior Investor

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    I did read through the article.. originally published in yahoo finance. Or at least that's where I found it from.
    They have some valid points but it's also just a lot of speculation. I am a bit skeptical of the current valuations but I still keep buying slowly but surely while keeping a nice cash reserve in case we do see a big dip.
     
  7. petesede

    petesede Guest

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    There is always someone saying a recession is ´here´. There are certainly certain sectors that I am bearish about ( energy) but for all the the craziness that is going on, there are a lot of companies that benefit from them. Mainly oil prices and China. I also think the unemployment numbers look great. They are good enough that it should lead to an uptick in consumer spending, but not so low that the Fed is going to panic about inflation.

    people like to jump on the Fed, but something must be said for their ability to maintain slow and constant growth without inflation while the rest of the world has all this craziness going on. Aside from a few bad days on wall street, the rest of the economy has trotted along while China, Russia and Greece try everything they can to create chaos.
     
  8. JR Ewing

    JR Ewing Super Moderator Staff Member

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    The unemployment number is misleading, because it neglects the labor participation rate, which has been lower than it has been in nearly 40 years. And net household income is down in recent years. Actual unemployment is still over 10%, and many people are underemployed or now working part time. Increased regulations play a big role here...

    With that said, I continue to do as I do... and as baudwalk mentioned, dollar cost average every paycheck and keep the power of compounding and longterm goals in mind.
     
  9. ScooterBrandon

    ScooterBrandon Senior Investor

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    Here in Canada the policy wonks just declared we are in a recession.
    If you moved out West to work in the oil sands you would agree, many of my friends had to come back from making 80K-150K a year in Alberta to make 30K-50K in Ontario.
    But things in Ontario this year have been booming.
    Manufacturing is seeing a big boost thanks to plenty of American orders, since our dollar's settled back around 75-80.
    Tourism has seen it's best showing in 10-20 years.
    Real estate is growing fast, as well as home and condo construction.
    Some say the GTA real estate boom is a bubble, but I don't see it.
    It's not a bubble when the demand is real not speculative. Prices are high because people want to live there and have the money to pay for it.
    TSX has seen some dips lately, but it's largly in response to oil companies getting hammered and world market conditions.
    I understand the #'s behind the recession call, but I just don't see it playing out in the real world.
    Things are good, people have money and jobs.
     
  10. norms options

    norms options Well-Known Member

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    In addition, the bull has been running for about 7 years now and that does not mean that the bear is ready now, but at some point there will be a pull back, correction, or crash. I don't ever try to time the market, but I do believe it is wise to keep some dry powder on hand to pull the trigger during significant market drops. Why not take advantage of a good sale, which is how I view a market drop--get the same great stocks at a lower price, and that just creates more opportunity for success in your overall portfolio.
     

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