My thanks to friend and former client, Wade Slome, President and Founder, Sidoxia Capital Management, LLL, for providing a third animal comparator for the stock market … “The Bunny Rabbit Market.” This was the title of Wade’s monthly investment letter for April (The Easter Bunny edition), which loosely compares the volatility that grips our current market and the bouncing around of a bunny rabbit. The entire article is a great recap of all the reasons we have been given over the past seven years, reasons why not to invest in stocks. It is worth your time.
Wade concludes: Even though April has historically been an outperforming month, banker and economist Robert Rubin stated it best, “Nothing is certain–except uncertainty.” We’ve had a bouncing “bunny market” so far in 2015, and chances are this pattern will persist. Rather than fret whether the Fed will raise interest rates .25% or agonize about a potential Greek exit (Grexit”) from the EU, you would be better served by constructing an investment and saving plan to meet your long-term goals. Sound familiar? I love it when people agree with me!
But, what about THE BIG ONE, that inevitable correction?
Yesterday morning an article appeared in MarketWatch, “Opinion: 10 reason why the bears could be right about this market.” Importantly they left out a very significant reason I’ll dub number eleven: A stopped clock is right at least twice a day. This is not to minimize the possibility of a severe correction (The BIG ONE) coming at any time. We are overdue and it would be normal. This absolute certainty should not be a reason not to invest. Remember, when you own a stock, you own a business. In the real world it would be unthinkable for a business proprietor to even ponder the idea of selling on the whim of an upcoming market correction or economic downturn. Only in the stock market is this sometimes less-than-wise alternative available. Also, many have avoided even participating in the equity markets over the past 7 years waiting for the BIG ONE that has yet to materialize.
Whether you are a bull, bear or rabbit, I would suggest you become a bird of a different color and not let the squawking provided by the media guide you down the wrong flight path.
What’s your take?
The information presented in kortsessions.com represents my own opinions and does not contain recommendations for any particular investment or securities. I may, from time to time, mention certain securities for illustrative purpose, names where I personally hold positions. These are not meant to be construed as recommendations to BUY or SELL. All investments and strategies should be undertaken only after careful consideration of suitability based on the risks, tolerance for risk and personal financial situation.