I ran into an interesting article in Fortune titled "Don't expect another bull market: Stock returns may never be the same -- at least for this generation of investors." The article made a bold prediction:
Barring a miracle -- or the creation of a New Math of the market variety -- there's no way we'll ever see a bull market along the lines of what so many of us grew up with.
This is very interesting from a sentiment viewpoint. A few years ago, at the height of the dot com boom, some claimed that we were creating a new economy in which the stock market could not go down. Then it crashed.
I say, don't buy into these extremes. In the long run, the market will have ups and downs, but will continue a slow long-term uptrend. We may have rough periods of adjustment -- like we are currently seeing in housing -- but that doesn't mean that the fundamentals have changed.
Articles like this can be a good contrarian sign. As writers predict the end of stock market gains, it may be a sign that we have reached the bottom.
Kevin Kersten is an Stock and Options Analyst with InvestorsObserver.com. Disclosure note: Mr. Kersten owns and/or controls a diversified portfolio of long and short positions that may include holdings in companies he writes about.
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Reader Comments (Page 1 of 1)
4-30-2008 @ 4:48PM
Oscar Yeager said...
The only difference I have seen of recent market performance compared with historical norms are that moves tend to come faster and harder lately, leading to all of this emotionalism and mental cloudiness about no more bulls or bears.
With the Dow dropping over 2,000 points in a short time, it should be obvious this bear market will run out of steam in the not too distant future.
During the dot com boom, the bull trend actually ran much further than I would have predicted, but a pace like that cannot run forever, bull and bear markets will always be around, just with increased volatility and volume as time goes on.