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Monday, August 8, 2016

Upcoming Market Opportunities

There are many areas where long-term investors can invest their savings in for long-term growth. However, not all of these areas generate substantial returns. 

For example, an investor who would have invested in Stocks in early 1990s and stayed in the market till 2000, would have gained a lot. On the other hand, if another investor would have invested in 2000, it would have taken him almost 12 years to break-even after the dot-com crash. 

Over the years, one of the most valuable lessons that I have learned in the markets is that don't lose money. It's a lesson touted by Warren Buffet and means a lot in investing. (10 best tips from Warren Buffet

"1. Never lose money
Warren Buffett's No. 1 piece of advice for 2016 is one he follows as closely as he can: "Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1." This rule applies readily to investing -- if you're working from a loss, it's that much harder to get back to where you started, let alone earn gains."

STOCK MARKET
Now that we know that preserving capital is very important, growing it is the second most important thing. However, in order to grow capital risk would have to be taken. But risk has to be calculated. As for the risk in the market right now, Stocks are in a very good shape. In fact, they are poised for a substantial rally.
Now, markets don't go up in a straight line and there has been some froth built into the sentiment, which needs to be cleared-up before launching a new rally phase. But in any case, the longer-term (1-2 year) trajectory remains up.


Following chart shows the market's hypothetical map for 
the month of August.

Recent rally, which started last week, could continue for another 1-2 days. It will be followed by sideways market action, which could fill-in the head and shoulders pattern, followed by a September break-out to new highs.


                                                                                                                                              

MARKET CLASSIFICATION MODEL
A proprietary algorithm that classifies market conditions i.e. Bull market or Bear market. Currently, this model is suggesting a longer-term up-trend for the US Stock Market. In fact, this model is close to triggering another new Bull trigger. So far in 2016 (Jan-July), our two proprietary portfolios are up 27% (conservative) and 55% (aggressive) [performance]. One can subscribe to MCM using link above.

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