{"id":53144,"date":"2014-06-22T21:42:30","date_gmt":"2014-06-23T01:42:30","guid":{"rendered":"http:\/\/countingpips.com\/?p=53144"},"modified":"2014-06-22T21:42:30","modified_gmt":"2014-06-23T01:42:30","slug":"stocks-are-at-a-new-high-its-time-to-buy","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/06\/stocks-are-at-a-new-high-its-time-to-buy\/","title":{"rendered":"Stocks are at a New High, it\u2019s Time to Buy"},"content":{"rendered":"
June 22, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

We don’t know much about Grand Cycles.<\/p>\n

But one smart bloke does.<\/p>\n

He says the stock markets<\/strong><\/a> are about to embark on a huge bull market.<\/p>\n

How does he know that?<\/p>\n

Simple, because 18 = 14 + 4.<\/p>

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Confused? This should clear things up…<\/a><\/p>\n

While we don’t know much about Grand Cycles, we do know about trends.<\/p>\n

In fact, looking for trends is pretty much the backbone of our stock analysis.<\/p>\n

Last year we launched a premium investing service focused on the technology sector<\/a>. Our gamble was that tech stocks were about to begin a huge price surge.<\/p>\n

We were right. And even with the sell-off in tech stocks a couple of months ago, this sector continues to boom. You only have to look at the takeover activity and new listings in the sector to see that.<\/p>\n

But that’s not the only booming market. There’s another market that could be on the cusp of an even bigger boom.<\/p>\n

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You can measure this boom in decades<\/strong><\/h2>\n<\/p>\n

The Wall Street Journal<\/em> reported last week:<\/p>\n

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‘The MSCI Emerging Markets stock index, which plunged 15% from late May 2013 to a trough in June, has since recovered all of that lost ground. Some markets — India, Turkey, South Africa — have registered larger gains.<\/em>’<\/p>\n<\/blockquote>\n

This is a trend we picked up on late last year.<\/p>\n

We’ve spent the past six months putting together a team and strategy to help investors profit from this trend.<\/p>\n

Now, you may think, ‘Haven’t you missed the boat if the market has already recovered?’<\/p>\n

Not by a long shot. This isn’t the kind of trend that you measure in days, weeks or months. This is the kind of trend that you measure in decades.<\/p>\n

So in the bigger picture, six months is nothing.<\/p>\n

We’ll explain more on this soon, including a special event that as far as we know has never happened in Australia before. Look out for details.<\/p>\n

But what we can say is that, for all the talk about crashing markets, the opportunities have rarely looked any better than they do now.<\/p>\n

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Buy when stocks reach a new high<\/strong><\/h2>\n<\/p>\n

US stock markets<\/a> have closed at another record high.<\/p>\n

The Dow Jones Industrial Average closed at 16,947 points.<\/p>\n

The S&P 500 closed at 1,962 points.<\/p>\n

And while the NASDAQ Composite index isn’t anywhere near a record high, on Friday it closed within three points of the high it reached in March. That high was the highest the index had been since early 2000…just before it collapsed during the ‘dot com’ bust.<\/p>\n

The fact that stocks<\/a> are at this high point is the main reason some are calling a top in the market.<\/p>\n

It’s a seemingly natural reaction — stocks are high, it must be time to sell. But stop and think about that for a moment. If stocks always crashed after reaching a new high, the stock market would never go up.<\/p>\n

The reality is that, contrary to popular belief, when a stock index reaches a new all-time high, there is a better chance that the stock will go even higher<\/em> rather than fall.<\/p>\n

Check out the following chart of the S&P 500:<\/p>\n

<\/a>
\nSource: Google Finance<\/strong>
\nClick to enlarge<\/a><\/em><\/div>\n

Over the past 30 years, there are only roughly three occasions when buying stocks at a new record high didn’t result in an almost immediate profit within a few short months.<\/p>\n

If you sold stocks after they reached a new high in 1989 and waited for a crash, you would have missed out on the following 11–year boom.<\/p>\n

You may recall that early last year, the S&P 500 index broke through to a new record high. At the time, folks hooted and hollered that the market had made a ‘triple top’. This was certain to mean another collapse — just like in 2000 and 2007, when the index last reached the same level.<\/p>\n

Only US stocks didn’t collapse. Far from it. Since then the benchmark US market is up more than 29%. So much for the idea of selling stocks when they reach a top.<\/p>\n

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Don’t bet everything on stocks, but bet enough<\/strong><\/h2>\n<\/p>\n

Of course, it’s hard to look at that stock chart without noticing the big falls in 2000 and 2008.<\/p>\n

That’s proof that stocks don’t always go up<\/a>. Sometimes they fall. And when they do fall it can be extreme and nasty.<\/p>\n

That’s exactly why we’ve gotten so frustrated with all the silly bubble talk over the last three years. Commentators have warned about so many supposedly dire crashes that investors are beginning to think stocks will never crash.<\/p>\n

That’s dangerous. At some point stocks will<\/em> crash. But when they crash, it will be because of a real reason, not because of the fake crises that have littered the market in recent years.<\/p>\n

Whether that’s today, next year or 10 years from now is anyone’s guess. The risk that stocks will crash is exactly why we suggest you don’t put all your money into stocks.<\/p>\n

In a bull market like this you may find that frustrating. After all, you’re potentially missing out on even bigger gains. But we prefer to keep stock exposure in the 50–60% range.<\/p>\n

If you’re tempted to throw caution to the wind and put all your money in stocks, just look at the chart above. Look at 2000 and 2008. That should be enough to give you pause for thought.<\/p>\n

Besides, our bet is that this market has plenty more to run. Even if you’ve only got 50% of your investable wealth in stocks, if we’re right about the Australian share index<\/a> tripling in the next five years, that’s enough to give you a pretty darn good return.<\/p>\n

US stocks are at a record high. In our view, that’s a great reason to buy<\/a>.<\/p>\n

Cheers,
\n Kris+<\/a><\/strong><\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

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


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au We don’t know much about Grand Cycles. But one smart bloke does. He says the stock markets are about to embark on a huge bull market. How does he know that? Simple, because 18 = 14 + 4. Confused? This should clear things up… While we don’t know much about Grand Cycles, we […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-53144","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/53144","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=53144"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/53144\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=53144"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=53144"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=53144"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}