The purpose of investing is to make a profit on a rising stock. That's easy to do in a rising stock market.
In January 2016, the market is clearly moving downwards and investors will need to wait for the bottom to be reached before considering an investment.
Some of the smart-lists from the Wall Street Genius lists (that help find candidates faster) are mostly showing very few stocks that are rising in the first week of this strong downward trend. That tells me again to wait for things to settle.
The last 7 years have been rising markets. Have the companies reached a peak? We only know the peak after it happens. Similarly we only know the bottom after it happens. The last day that we had a mildly upward overall market was Feb 18, 2015. Since then the long term sentiment for the stock market has been flat or downward. There have been individual stocks that did well, but the "easy investing" days have been absent for about a year. When I speak of the Market I mean for the top 6,000 stocks.
For short term investors, and especially for Day Traders, the last months have been very good. A strong market is excellent for a day trader because they enjoy making a profit on the falling or rising shares. Call it unfair if you wish, but these tools are available to everyone.
It's difficult to be patient at times as an investor (and having waited a year for the easy upward market).
It reminds me of a story my dad told me: the 1950's when a moose was trying to cross a back-country logging road. There were many large semi-trucks rambling down the hill at great speed. A steady stream of them. A moose is a big animal, but smart enough to know it wouldn't survive being hit by a larger truck laden with large logs. So it waited for a couple minutes until it saw a smaller cube van. It darted in front of that and destroyed the van. The moose became the burger meat for the men at the logging camp. The moral is obvious: Sometimes its better to walk away than force a bad situation into something it's not going to do.
Note: There are some stocks (for swing trading) that can be bought in a bear market where the stock goes up. For example, DOG is based on the DJIA ("DOW") but is meant to be inverted for such a purpose. You buy it (if you don't like shorting a stock). Similarly there are many other "inverted" stocks to help buyers stay as buyers in a falling market. An avid swing trader would look at these, but most longer term investors would just wait for the bottom.
When it becomes a bull market again, will you be ready to take advantage of it? We'll post blog items here but the education takes a little preparation. Our book explains most of the key features you need. This website is meant to extend and continue that information so you can master the markets easily and confidently.
The last time the Market was good was July 7, 2014. The DOW 30 continued to move up well, but the overall market was getting weaker.
The last time the Market was strong was Feb 19, 2013. Again the DOW 30 steamed along fairly well, but this is more proof that the overall market is not the same as the DOW 30. The overall market tells the full story. And given that the overall market lost momentum two years ago, and continued to slow down since then, it's no surprise that the Bear market is taking over for the near term until things are balanced again.
