Basically, the author is making the point that the stock market is rising because we have a positive bubble that exists within a larger negative bubble. In other words, stocks will do well for a while, then that period will end and we'll see stocks dropping again.
http://articles.moneycentral.msn.com/Investing/JubaksJournal/why-stocks-worries-are-both-rising.aspx
Strong market rallies -- even three- to four-year cyclical bull markets -- can take place inside a longer bear market trend. And despite a bull rally, the long-term trend can still point very strongly down.
I think that's exactly where we are now: in the midst of a strong cyclical bull rally that's taking place in a long-term bear market downtrend that began in March 2000 and could have five to 10 more years to run.
But I think understanding that we're in a cyclical bull inside a secular bear market is the best way to explain why this stock market feels the way it does, why so many investors still doubt this rally even after a 70% gain and why it has been so hard to go along for the ride.
And that feeling you have that it's all going to end badly? It's perfectly normal and likely as not to be correct in the longer term, if this is still a secular bear market.
It's a very educational article, and I urge you to read the entire piece.
This is a real problem of sorts. But the magnetism drawing you to exceptional deals and moving head....is a fair burden. I have a stock that I bought in November, and it's given me eighteen percent growth. So it's around 120 days and that much growth...and could do another twelve percent up to summer. I should sell now and be happy...but the potential gains outweigh the risks...so I trudge on.
ReplyDeleteCall it optimism, greed, or just high hopes...but the market has functioned like this for two hundred years. At some point...hopefully I see the trend coming shortly and just sell to be happy with what I gained.