Another Awesome Down Market

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The U.S. stock markets are having a pullback.  I’ll continue writing about stocks in the interim, but I’m not going to pretend that they’re going up, if the charts are neutral or bearish.

I’ll just tell you the truth — as I see it — and you can make your own investment decisions.

Take note, however, that I have a tremendous track record of calling market tops and bottoms.  The most recent instance was on October 15, 2014.  That was the lowest market close during the most recent market correction.  And I said so, telling investors which stocks to “buy low”, even though most investment professionals are completely unable to identify market tops and bottoms.

But I can do it.  So I’m fairly relaxed about it.

We’re not at the bottom of the current correction yet, but it could be here within a few short days.

Along the lines of calling market bottoms, let me tell you an investment story.  (I have lots of stories.)

In 1994, we had a serious bear market in U.S. Treasuries.  I was a Financial Advisor at Dean Witter (which later purchased — and changed its name to — Morgan Stanley).

As is common during down markets, everybody acted like the world was coming to an end.  Except me.  My thoughts were like this:  “U.S. Treasury bonds are guaranteed to mature at full value.  They’re on sale today, which increases their yields.  Why wouldn’t everybody be buying?”

And so, I bought U.S. Treasury bonds for my clients.  And bought, and bought, and bought.  Zero coupon bonds, to be specific.  Because they’re more volatile than the regular Treasuries.  That means they swung farther down in price, and that they would subsequently have a bigger rebound.

All I could see was capital gains, and they looked mighty attractive.

I bought those zeroes, probably in late ’94 and early ’95…I forget the exact dates.  What I remember is being home with my first infant in December ’95 and January ’96, and cashing in my clients’ zero coupon bonds.  I also remember one of those lucky clients making a 42% short-term capital gain.  They made money, I made money, everybody was happy.  The baby slept a lot, and didn’t cry much.

She’s in college now.  And lo and behold, here’s another market downturn…this time, U.S. stocks.  Yawn.

Get your shopping list ready.  We’re about to “buy low”.

Happy investing!

 

Crista Huff
President
Goodfellow LLC

All eight 2013 and 2012 Goodfellow LLC stock portfolios

dramatically outperformed both the S&P 500 and the Dow!

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