by Mike Cintolo of Cabot Wealth Advisory
What is your current market outlook?
My current market outlook is generally bullish, although some corrective activity (a 5% to 10%-type market decline) is always a possibility after an advance like we've enjoyed since March. Still, I think what's more important is the bigger picture, and on that front, I am very bullish.
The reason deals with market history. Back in March 2000, investor perception was literally as high as it's ever going to be--everyone believed the Internet was changing the world, valuations didn't matter anymore, and for 20 years, the market only suffered brief, sharp bear markets (nothing prolonged in nature). Every investor thought 10% per year was poppycock--15% to 20% a year was doable. And many ordinary citizens were leaving jobs to be daytraders. Crazy!
Fast-forward to March 2009 ... exactly nine years later. At that point, I believe we witnessed the complete flip-flop in perception. Investors were not only worried and pessimistic, they feared for the future of our financial system; never before had the market fallen so far, so fast, and never before had so many big firms gone belly-up. It was pure panic.
In my opinion, that March 2009 period will mark a major, major low for the market--I'm not big on predicting the future, but it wouldn't surprise me if the Dow never again fell to the mid-6,000s like it did in March.
Thus, while corrections can come and go, after more than 10 years of the market making basically no progress, I believe the worst has passed and we're in a bull market of unknown duration.
Posted on
Mon, October 26, 2009
by Mark Simmons