When will the market peak? Do you have an exit strategy?

exit-strategy

Yep, that’s the million dollar question everyone wants to know. But who knows the answer. Towards the end of last year I put out a recommendation to buy, buy, buy. Today, however, I am changing my tone. I believe (take it for what it’s worth) the market is nearing it’s peak as far as the next couple of years are concerned for multiple reasons of which I will discuss below. Clearly, I am not saying that there is not the potential that the markets can and will go higher, I’m saying it’s only a matter of time now before they contract again.

  • Fundamentals are no longer supporting stock prices, they seem driven by speculation that can’t last forever. There is only so much cost a business can cut before less sales undermine profits.
  • Interest rates will increase before long, stocks will become more expensive
  • Gold prices are in for a rude awakening, there may still be some short term gain – don’t expect it to last forever
  • Still too much uncertainty in real estate, prices still haven’t stabilized
  • People aren’t spending like they used to. People are cutting back on credit card purchases and this means poor retail sales in the future.

Above are only a few main points in my belief that there will soon be a correction. There are many more reasons besides those. What’s your exit strategy? Have you developed one?


Leave a Response

You must be logged in to post a comment.