COMMON SENSE

Final wrap up of secular markets and the dangers of “buy and hold” theory that wall street touts through it’s “market media matrix” networks.  If you review the videos, part one shows you how a typical depression era bear market behaves.  The price action is similar to that of the NASDAQ market, reaching a high of 5000 points only to lose 80%.   It has been 9 years, and yet the NASDAQ  has failed to return to new highs. However, the Dow Industrial Index made new highs.  The reason for the Dow Jones Industrial average reaching new highs was because this index is largely “commodity based”.   The stock exchanges changed the stocks of this index during the first cyclical bear market in 2000, putting a few high tech stock into the index and some diversified financial services.  The Fed has created the biggest liquidity trap in history of the world, by creating the housing bubble through mortgages and other creative financial products.   These problems have not been addressed, but the Fed and the Treasury have placed your children and grand children into bondage through confiscatory taxes.

None of the “toxic assets” have been sold, yet, the Wall Street Traders and you, being invested in your 401k plans, have been participate in this short term cyclical bull market since March of this year.   You have also been conditioned to “believe”  Wall Street” can solve all the financial crisis, even the politicians have been convinced.  However, if you have any doubts about Wall Street’s competence, then you should be worried about the next financial crisis.  Using some common sense, and some technical training, you can determine when the market is overbought and over sold.   I have developed some simple tools to get you started.  I will be doing the rest of the 9 myths about investing over the next several weeks.  If you have any questions,  please email me or leave comments on the blog.  You will have to be registered to leave comments, so go register and let me help you out of a loosing position.  You can follow me on twitter, which I send updates on 401k plans, insurance companies, banks, and other financially interesting story I find on the internet.

Doc

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The Buy and Hold Myth, part 5, looking at next week, the market will have  price reminisces of last years stock market.  Now, if you thought the market reached it’s low last year, you still suffered losses through the low in March 2009.  How would you like to learn how to avoid these unnecessary market drops, you will have to learn technical analysis to time the market during these short term cycles.  My blog post in Jan, 2006, I explain how the market media matrix manipulates into thinking there is always and eternal bull market.  I reviewed Jane Bryant Quinn article about the theory of “buy and hold” for long term investors.  I think you will find it interesting to know that if you missed the best 90 days of market gains, you would have a paltry$2.70 for every dollar invested.  If you followed the “buy and hold” theory, you would have $75 for every dollar invested.  Now that sounds like a good case for buy and hold, right?

However, if you would have missed the worst 90 days of the market, your gains would have been $1694!   I guess Wall Street’s “market media matrix” does want you to know about that!

• A.  buy, hold, hope for 42 years for 90 good days in the market, results $75.
• B.  time the market yourself and miss the best 90 performing days, results $2.70
• C.  use Doctrader’s  “red signal line” to avoid the worst performing 90 days of the market, results $1694.

Raise your hand if you can see which choice you want!

Introducing the “red signal line” to determine if the market are in a long term bull market or a long term bear market.

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Part 4 of the Buy and Hold Myth series shows the current secular bear market, beginning in 2000-2003.  The beginning of every Secular market, lasting 18 years, begins with the short term cyclical market (lasting 18-36 months) of the same type.

Currently, if you measure your current rate of return since the year 2000, you may you will be disappointed.  The next few days, you should receive your quarterly 401k statements. Do you dare to open them up and compare your results since the last quarterly statement? To read more about my Market Cycle theory check out my blog post last year, warning investors, at “What is the Weimar Republic?”

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The Myths about Buying and Holding Stocks for the long term is just that, a Myth!  In Part 3 of the Video series I am show you where the Baby Boomers begin moving the market, first as dependents, then as consumers.  My blog post last year about the Great Depression or Recession I wrote, ”

Currently, the demographics are unclear relating to the baby boomers, yet by Nov. 4th, when the elections are closed will there be riots on main street or a selling riots on Wall Street?”

Looking at the stock market for the previous secular bear market, you can see for yourself, the market didn’t make new highs, but was stagnant.   The Demographics of the Baby Boomers, were still in the early stages of getting their first jobs, starting their families, and begin to invest through their company’s 401k plans. The baby boomers were early adapters of the new technologies to increase their productivity.

Coming out of the 1966-1984 secular bear market, they begin the Greatest Bull market that will never be repeated again.  Stay tuned for Part 4 of the “Buy and Hold Myth”.

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