With all the money currently be printed and the more quantitative easing down the pipeline; Is now the time to buy? This is the question of the year. Buying today suggests that one may miss a historic run in equities while waiting suggests that there will be a better buying opportunity in the future. I happen to stand in the camp that better opportunities come to those who wait. Below is the S&P over the calendar year 2011. Yes, it did go down (even more then 1%).
My market analysis is not based on the mere fact that the financial markets will be facing many headwinds in the coming months, but rather the fact that markets do go down. No matter how much money is pumped into the system markets can, do, and want to go down. Take a look at last Tuesday. The markets went down hard and fast. This was a foreshadow of how things will happen when sentiment changes. It will happen before many investors are out of bed, and will hit hard and fast. Last year has been forgotten, thrown in the basement swept under the rug, and this will cost many their shirts.
The experts are suggesting that this moment, right now, is a once in a lifetime opportunity. Retail investors are eating it up and instead should be running for the hills. Thinks are arguably better in the United States, though they are not good. That is the key point that many investors are missing; For this to be a historic moment things would need to be good, not mediocre. I am not going to run through all the coming headwinds, you read, you are informed. What has more significance is the fact that things are not perfect and the market is acting as if the world has no flaws, it does, and those flaws are bigger then meets the eye.
So make your money and do it quickly because when things collapse, which they will, it will once again not be a pretty picture. So to summarize for those that missed my point, a better buying opportunity will present itself in the future, just ask 2008, July of 2011, and sometime in 2012.
“For every action there is an equal and opposite reaction.” Isaac Newton