{"id":29094,"date":"2012-04-16T10:44:05","date_gmt":"2012-04-16T14:44:05","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/04\/is-this-bull-market-over\/"},"modified":"2012-04-16T10:44:05","modified_gmt":"2012-04-16T14:44:05","slug":"is-this-bull-market-over","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/04\/16\/is-this-bull-market-over\/","title":{"rendered":"Is This Bull Market Over?"},"content":{"rendered":"

Article by Investment U<\/a> <\/p>\n

\"Is<\/p>\n

Lately the market has been wilting like last week\u2019s roses, drooping in one session after another. Is the bull finally headed out to pasture?<\/p>\n<\/div>\n

The market had a strong first quarter this year. The S&P 500 rallied 12% on the heels of an 11% gain in the fourth quarter of 2010. In fact, it has more than doubled from its bottom on March 9, 2009.<\/p>\n

But lately the market has been wilting like last week\u2019s roses, drooping in one session after another. Is the bull finally headed out to pasture?<\/p>\n

Don\u2019t count on it. While no one can forecast the short-term zigs and zags in the market, there are three good reasons to believe there\u2019s still life in this bull:<\/p>\n

    \n
  1. History shows that pullbacks don\u2019t generally follow a strong first quarter. The S&P 500 has soared 10% or more in the first quarter eight times since 1945. According to Standard & Poor\u2019s, the market rose three-quarters of the time in the following quarter. And the one other time the market rose 10% or more in both the fourth and first quarters, stocks gained 5% the next quarter.<\/li>\n
  2. First quarter profits are likely to be another record. Don\u2019t forget that corporate profits have hit all-time records in each of the last eight quarters. And \u2013 while the reporting season is just getting under way \u2013 this time isn\u2019t likely to be any different. Yes, the gains will be more modest this time thanks in part to higher oil prices and tougher year-ago comparisons, but we\u2019ll almost certainly see more all-time record profits for the first quarter and a few big surprises could send stocks higher again.<\/li>\n
  3. Investors are still afraid. That\u2019s actually a good thing. As John Templeton declared, \u201cBull markets are born on pessimism, grow on skepticism, peak on optimism and die on euphoria.\u201d You talk to anyone lately who\u2019s euphoric about the economy and the stock market? Me neither. And people aren\u2019t investing their money that way, either. According to The Investment Company Institute, investors yanked $1.2 billion out of stock funds in February after taking out $423 million in January. History shows a near perfect correlation between equity fund redemptions and stock market performance. It\u2019s when investors starting throwing cash at the market that you need to worry. And we\u2019re a long way from that.<\/li>\n<\/ol>\n

    When you look at the fundamentals, it\u2019s surprising just how negative the average investor is. After all, we\u2019re enjoying low interest rates<\/a>, low inflation, expanding markets overseas (especially in the developing world) and all-time record corporate profits.<\/p>\n

    What\u2019s keeping most investors at bay, of course, is volatility. And not just lately. Investors have been clobbered by two massive bear markets in 12 years. The 2000 to 2003 bear market took stocks down 49%. It was the worst market since the Great Depression \u2013 until the 2007-2009 bear market showed up. That ripped 57% from the leading market index.<\/p>\n

    Last year, the S&P 500 fell 3% or more six times, and on one gut-wrenching day in August, 6.7%. That made microscopic money market yields look attractive.<\/p>\n

    Of course, volatility<\/a> is the price of admission in the stock market. If equity accounts rose as smoothly as bank accounts, everyone would be fully invested. But they\u2019re not. Not even close.<\/p>\n

    Paradoxically, that\u2019s another reason stocks actually look pretty good here.<\/p>\n

    Good Investing,<\/p>\n

    Alexander Green<\/p>\n

    \n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

    <\/p>\n

    Article by Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

    Article by Investment U Lately the market has been wilting like last week\u2019s roses, drooping in one session after another. Is the bull finally headed out to pasture? The market had a strong first quarter this year. The S&P 500 rallied 12% on the heels of an 11% gain in the fourth quarter of 2010. … <\/p>\n

    Continue reading “Is This Bull Market Over?”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-29094","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/29094","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=29094"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/29094\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=29094"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=29094"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=29094"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}