“You want to own stocks, right now.”
I wrote that in bold letters back in March 2009 – right here in DailyWealth.
Those words might not sound like much now… but they were downright crazy in March 2009.
Let me take you back, briefly…
We’ll go back to that specific moment in time. And then we’ll look at where we stand in the markets today…
The financial world was worrying which domino was going to tumble next.
Heck, even the best pros wondered if our banking system would even survive.
We were in the midst of the Great Recession.
The major stock market indexes had been slashed to half the value of their October 2007 peaks.
It’s an understatement to say that people were scared.
A more correct statement would be: “People were scared the financial world was about to end.”
Asset prices are cheapest when there’s “blood in the streets” – as the old saying goes. Whenever panic and uncertainty reach a fever pitch, asset prices fall, and keep falling.
It’s now been 10 years since the stock market bottomed, and we haven’t seen an official “bear market” in all that time. Ten years is a long time for a stock market boom. No question.
Perhaps even more interesting – and less talked about – is the fact that it’s been 10 years since we’ve even had a recession.
It’s hard to believe what I’m about to say is true, but it is: My teenage kids don’t even know what a recession looks like.
If we make it to June without a recession – and it’s likely we will – this will be the longest sustained period of economic prosperity without a recession in American history. That’s going back to the 1700s.
The law of averages has to come into play here soon, right?
The longest expansion in American history can’t go on any longer, can it?
It can…
Looking at the average lifespan of a stock boom or an economic expansion is not a particularly useful yardstick for how much longer these booms can run. There is no expiration date… They do not “just stop.”
Instead, you have to simply assess where you are at that moment in time.
Right now, we are certainly not at the beginning of the boom – where asset prices are cheap and people are fearful, clutching their cash.
However, we are certainly not at the end of the boom, either…
At the end of a boom, people believe we’ll never see a rainy day again. They throw all their money at investments because they believe they can’t lose. Even worse, they start to borrow money to throw at those investments, too.
We last saw this behavior in a big way at the peak of the real estate boom in 2006-2008. (We last saw it in a small way during the bitcoin bubble at the end of 2017.)
We are not seeing this behavior in a big way in today’s stock market… yet. But we will. It’s coming.
My suggestion to you is to be bold. Asset prices could very well soar as we go into the final stages of this great bull market.
A recession and a bear market are a certainty – someday. But that day is not arriving soon – 10 years in or not.
Take advantage of this moment in time for what it is… a chance to make huge profits as the Melt Up continues.
Good investing,
Steve
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Source: Daily Wealth