When the bull market has been riding high for a while like the one we’ve been experiencing, analysts love to answer the one big question everyone wants to know….”How long will it last?”. Wednesday October 15th, was an interesting day on Wall Street, and by interesting I mean stressful. We saw the Dow take a huge 460 point dip on economic and Ebola fears, only to rally by the end of the day and be down 173 points. Since then the market has been steadier, but many were left wondering what could be next.
October is usually seen as a declining month for equities, so this volatility isn’t surprising too many seasoned investors. But the analysts are having a field day pontificating whether this bull market will end soon. So will it? After a quick internet search, I found articles with every answer imaginable. I guess it just depends on what you want to hear. I found two extremely contradictory articles from the same website: CNBC. One article says the latest market rally is a “Peter Pan rally”. “As long as you close your eyes and believe, you’ll be able to fly. As soon as you stop believing and doubt creeps in, everything falls apart”. So that article says now is the time to sell. Another article on CNBC, says to prepare for more market gains. It says “in short, not even October jitters are enough to prevent the historically strong months of November and December from turning positive performances”. This article is saying you should stay put or even buy.
So what do we do with all this conflicting information? We buy and hold, like I’ve said in previous posts. Because, while they all try with their fancy analytics and formulas, no market analyst can predict the market’s future.
Finally, just for a chuckle, this article says you can predict the rest of the year’s economic future by how many dogs you see in Halloween costumes this year. Jeff Macke, an analyst for Yahoo Finance, says that “There are no items on the planet earth as discretionary as a dog’s Halloween costume”. So there you have it folks, the participation level at your local Halloween puppy parade is now the financial equivalent of Punxsutanwey Phil seeing his shadow.
Photo Credit: James Manners