When will the market peak? Do you have an 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?

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