I’m no perma-bull, but being bullish in a bull market has been the way to go. As I like to say, it is not exactly rocket science to be bullish when things are going up. Sure, pullbacks and temporary losses are just part of the ride, but I have no problem doing a U-turn and going full-on bearish when needed. Money is to be made on both sides, as we saw in 2000 and 2008.
Right now, while everyone is clutching their pearls, convinced the markets are overbought and overpriced, I see a good chance for a strong move higher. Yes, really. This is a secular bull market with plenty of fuel left in the tank.
Investors need something to stress over. The moment one worry fades, a shiny new one magically appears to take its place. The spike in volatility as we approach the US elections? Completely expected like fireworks on the 4th of July. Political uncertainty always adds some extra spice to the markets. Another economic concern is an escalation in Middle East tensions that could significantly increase the price of oil.
Please keep in mind that increases in volatility can be very emotional and represent mispricing opportunities for traders. We have been here before, markets adjust, and so do we.
Of course, this bull will eventually run out of steam. When it does, I expect a “crash” that will make the crash of 1929 look like a distant relative you only hear about at family reunions. When that time comes, I will be ready, locked and loaded to take full advantage of it.
Some of my clients seem to view the environment as most everyone else. Some of our more aggressive plays have been a bit wobbly thanks to short-term volatility and market swings. Believe it or not. These swings are still within the range of what we expect. We are focused on our long-term goals, sticking to our strategy with discipline.