Road Map 2011 - SPDR S&P 500 Trust ETF (NYSEARCA:SPY) | Seeking Alpha
Owen Williams has written a very interesting article comparing 2011 to 2014. You may recall that 2011 had a 20% correction in August and September. We could possibly expect the same scenario in 2014 because there is a lot of trouble in the world, and the smart money is buying long term government bonds. The only question in my mind is whether it will be a 20% correction or an all out bear market of -40 to -50%.
Mr. Williams is correct that bear markets usually start when we have high interest rates, and that is not the case today. Since we have low interest rates now, the author is probably right that we are just in for a big correction. TLT is the way to make money in the correction, and if it turns into a vicious bear, you will make even more money. Whichever way the market goes, you should be skeptical about holding a lot of stocks in the present situation.
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