It’s so easy to make money in the market these days 😀 If you bought the Dow Jones index 18 months ago, your investments would be up 30% today!
But the chart below may be a strong signal that these good times will likely be ending very soon! *gulp* 😯 The darker green line indicates the Dow stock market index today and its performance over the last 18 months. As you can see it’s mostly good news 😀 But the lighter cyan line above represents the same index, also over an 18 month period, but 85 years ago.
As you can see the 2 lines are very similar so far 😉 There’s probably something fundamentally the same within the different periods of time that’s driving this synchronicity 😕 It was right around this time of year back in 1929 when the market had a major correction, and by summer of 1929 the Dow had lost 20% of it’s value from the peak in early January. Does this mean the Dow will do the same this year in 2014? A 20% correction is not that rare for the stock market, and if the Dow continues to follow the historical trend set 85 years ago then maybe it’s time to sell some positions and lock in the profits. I mean, look at how eerily similar the 2 charts are 😐
If you believe we are in for a downturn then maybe add more bonds, like XBB, to your portfolio as a bit of protection. But if you think the charts lining up is purely coincidental then carry on with your stock investing. Personally I have no idea what to think about this data so I’m going to sit on the fence and hold all my long positions, and will not buy any new stocks until April.
Random Useless Fact: Most foreign students only seem smart because all the dumb ones stay in their home countries. #NoOffence