Four Year High!

Traevin... you are a wise man.

I also have significant misgivings about the current stock market and believe that it is due for a serious correction. As you point out, we never do know when such a correction will arrive or how deep it might be. Those types of things belong in the realm of the future and none of us knows for sure what the future holds. Still, we can make some pretty good educated guesses.

This market makes me uncomfortable because it does not seem to be based on stock fundamentals. Instead, it is based upon the market distortions created by the Government and the Fed. We have a stock market that is not creating very many jobs, so a lot of people talk about a "jobless recovery"... whatever that is. In my mind, a recovery is just that... a time when both companies and labor do better than they have been doing.

The Fed has "injected" more than $5T into the market since 2008 and that money has forced stock prices higher. What we are seeing is not economic growth but inflation masquerading as growth. If we had real growth we would have a lot more jobs and not just service sector jobs or minimum wage jobs but REAL jobs that pay REAL wages. If we were producing more, we would be exporting more and we're not. Tax receipts, as reported by the US Treasury Dept., are lower today than they were a year ago. They may be able to fudge the unemployment numbers but they cannot as easily fudge the tax receipt data. It is what it is.

Also, this IS an election year, so the Fed and the Government will do all that they can to make everything seem just peachy when it is anything but that. I think that 2012 will probably be a decent year for stock investors but 2013 could be a real ripper. I plan to be VERY defensive as 2012 comes to a close. We do not know how the election will turn out and the result of that will play a very large role in whatever follows. Getting defensive means that I want to be out of this market by October 1 at the very latest. If that causes me to miss some year-end gains, then so be it. I can live with lost gains but not with substantial lost principal.

Well, thanks for that and you are most welcome. It is a real pleasure to converse with others who can articulate their ideas and share them. We can all learn a lot in this way. The collective experience of the people on this site is pretty amazing and far exceeds that of any one of us.



I don't really know but that IS an interesting question. Perhaps wisdom is the scar tissue on our experiences?



I can relate to that. I've made and lost quite a bit of money in the stock market over the years. In the 2001 crash, for example, I lost about $230k from my 401K plan. That was about 1/2 of its value at the time and VERY painful. I got a repeat of that in 2008, losing about $275k from my IRA. The good news is that ALL of the money "lost" in 2001 was recovered in 2002-2007 and more was added on top of that. The losses from 2008 have mostly been recovered, thanks to mid-2009 through 2010. 2011 was OK for me as an investor but not great. I became somewhat philosophical about money. It seemed to me as if money was like an ocean tide... it rolls in and it rolls back out. After all this flailing about was said and done, I still ended up WAY ahead of where I would have been had I not invested at all. I'm not deprecating the value of investing in silver or gold at all. Both have been excellent for the past several years and seem poised to do at least as well for the next several years. In my case, though, I just was not interested in them until late in 2010, so have only been at this for a little over a year. I hope to have about 10% of so of my net worth in PMs sometime in the next year or so. I'm not an "all in" kind of guy, so will hedge my bets via diversification. That has worked well in the past and it may do so in the future as well. No guarantees on that, though.