Wednesday, January 7, 2015

Bill Gross Thinks 2015 Is The Year It All Falls Apart

Bill Gross Thinks 2015 Is The Year It All Falls Apart



This is a great article about the predictions for 2015 by Bill Gross, the bond king.  He talked about negative returns in a lot of asset classes, and he implied there will be a lot of volatility in the stock market this year.  I agree with Bill 100%.  Just a few months ago he was predicting 2-4% bond returns and 5-6% stock returns over the next seven years.



What this means is that you will make more money in trading stocks during market volatility than you will make otherwise.  We will probably have several 5-10% pullbacks this year, and if you can make 5% during each of those pullbacks, you will probably make 25% or more for your money this year.



I sold part of my TMF long-term treasuries position yesterday for $97 per share when it looked like the market was rebounding off the bottom, and I made more than 10% for my money on the trade.  Then, I bought UDOW, the 3x Dow ETF, to ride the stock market up to 18,000 on the Dow again.  Once we get close to the former Dow high, I will load up on TMF again for another down cycle.  2015 will not be a straight up year like 2013.  Those days are gone, and volatility will be hanging around for the next few years probably.

 

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