Investment U’s Outlook: Bull or Bear?
Alexander Wissel, Editor in Chief, Investment U
We keep hearing over and over again that we’re vacillating on our market position and that we’ve taken bullish and bearish stances over the past few weeks. Specifically, readers have cited Alex Green’s article for its bearishness and Mark Skousen’s article for his bullishness.
If Alex Green’s article title suggested bearishness, then I’ll admit fault and suggest that the addition of “Red” might incorrectly indicate that he is bearish when he is not – Alex remains cautious, but bullish.
Let me set the record straight if there has been any confusion concerning our outlook…
In the long-term we are, have been and will continue to be, bullish on the future. In the short-term, we see a number of challenges – some which lead us to bullish conclusions while others require us to be more concerned.
Our biggest concern is the potential for a pullback in the near-term. It could impact short-term trades. However, anyone with money in the market should have a timeline of at least five years or more. With that kind of timeline, equities look undervalued.
One of the other concerns we see on the horizon is the “consumer recession” – the result of hundreds of thousands of layoffs, little savings and record consumer debt levels. Our economy has always relied on the free-spending American consumer.
What happens when they cannot afford to spend any more?
It’s an open question, but the concern is that if Americans don’t start getting back to work soon, we could see the residual effects of this recession last much longer than anyone thinks.
One of the most interesting things we’ve seen over the past week has come from the think tank over at Bespoke. The lined up the charts from the current 2007-2009 period with the 1936-1939 crash. The similarities are interesting to say the least.
Based on these charts, we could see a pullback in the near-present future.
Generally we try not to pay too much attention to the market’s fluctuations and churning other than looking for buying opportunities – and that hasn’t changed.
But with the carnage we’ve seen over the past year and a half, we’re more likely to caution readers on short-term pullbacks, lest we upset their fragile confidence.
Regardless of the short-term pressures, we can be positive that we’re going to see a volatile summer and fall. And as investors we need to keep our wits about us and our eyes peeled so that we can pounce on the opportunities as they arise.
And it’s a lock that we’re going to see buying situations and bargains present themselves in the next year that we may not see again, conceivably, for our lifetimes.
Good investing,
Alexander Wissel
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