If anyone out there bought the stocks I recommended in the past year, when I recommended them, you made a pretty penny. But as they say, all good things must come to an end. While I don`t think the long-term bull market is at an end, it’s in the final mile, and I predict a stock market correction this summer. So, my recommendation today is to lock in your profits, or at least start selling your shares and moving to a cash position. Sell now, lock in profits, and wait for the downturn this summer. When the market drops 5% to 10% from its recent peak, buy back in again. Predicting tops and bottoms of market turns is impossible, but close watches of the market can come close, and I follow the market closely.
Here’s the logic behind my summer-correction prediction: there is an old adage of “Sell in May and go away”, because historically, market returns during the May to October months is lower and more often negative in relation to the other months. That’s one factor. Another factor is that when emerging markets and weaker economies are disrupted by hyperinflation and geopolitical vicissitudes, there tends to be a domino effect leading to economic and stock market turmoil globally. In 1997 it was the Asian currency crisis, in the past decade it’s been the European countries, and this year we have Venezuela and Argentina causing major disruption in South America while Russia struggles under sanctions and European countries have massive debt loads and sluggish economic growth. Combine that with rising oil prices and the looming specter of inflation, and you have the perfect recipe for stock market volatility and a correction.
Tech is currently overvalued, so that whole sector is a sell, but oil is a hold as global politics will keep oil prices elevated and rising. Especially if there’s a sudden drop in the value of the dollar due to the unsustainable debt load and spending by the current Republican-controlled Congress and White House.
Those are my current predictions, but they are subject to change, so stay tuned for updates. In the meantime, I hope all of you keep making that money, money, money.
a life without parole 