In the hit movie “Back to the Future“ Michael J Fox had access to a time machine, allowing him to go back and forward in time. So what if we had access to a time machine and we went forward in time, just a mere 30 days….. the election and QE2 will be a month old, what will the world look like? With these two issues settled, will knowing what to do with your monies become crystal clear?
I receive many personal emails from viewers expressing this frustration….”I just don’t get the disconnect between the fundamental news and the market performance!” Dr. John Hussman, who is a terrific mutual fund manager and writes a must read weekly column (see this weeks thoughts) stated this week that “valuations matter…..Though valuations often have little impact on short-term returns over periods of less than a few years!” Could he have also said, elections or QE2 have little impact on long-term market results?
We live in a complex world! I have no idea how the elections will turn out tonight and I have no idea how much fuel the Fed will attempt to throw on the fire with QE2. What I do know is this….regardless of the news, patterns have shown a tendency to create repeating RESULTS for the past couple of hundred years, regardless of elections or stimulus activities.
Many feel today (Elections) and Tomorrow (QE2) will greatly impact the direction of the economy. I don’t know what the results will be or how the world will react to the results! I do know this…..Today, a month or 10-years from now, I will remain focused on “Patterns and Price action” and how these tools can help us “inflate our portfolios, regardless of (the news) or market direction!”
At this point in time, many of the major markets are facing resistance right now! Resistance is resistance until broken. IF resistance is taken out, I will follow! If you must own this market, I would do it via the “High Yield mutual” funds I have discussed on numerous times.