Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19
Gold Price Gann Angle Update - 10th July 19
Crude Oil Prices and the 2019 Hurricane Season - 10th July 19
Can Gold Recover from Friday’s Strong Payrolls Hit? - 10th July 19
Netflix’s Worst Nightmare Has Come True - 10th July 19
LIMITLESS - Improving Cognitive Function and Fighting Brain Ageing Right Now! - 10th July 19
US Dollar Strength Will Drive Markets Higher - 10th July 19
Government-Pumped Student Loan Bubble Sets Up Next Financial Crisis - 10th July 19
Stock Market SPX 3000 Dream is Pushed Away: Pullback of 5-10% is Coming - 10th July 19
July 2019 GBPUSD Market Update and Outlook - 10th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

You Can Still Make Big Money in This Stock Market

Stock-Markets / Stock Markets 2013 Jun 28, 2013 - 04:57 AM GMT

By: Investment_U


Marc Lichtenfeld writes: This weekend my family and I were checking out a local bookstore when I came across a magazine called The Intelligent Optimist. I would have bought it but I doubt it’s any good. (That’s a joke. Think about it.)

But a long-term investor is an intelligent optimist – and in this market, that’s not any easy thing to be.

There are always good, logical reasons to be a pessimist.

•The government stinks.
•The economy is tepid.
•Our education system is broken.
•Taxes are up.
•Privacy is down.
There are also always reasons to be a bear.

•The market is overvalued (it’s not at the moment, but that doesn’t stop bears from saying so).
•The market is rigged.
•The bull market has already gained 153%.

Years ago, while working for a permabear, I learned there is always a rational argument for being bearish. It’s easy to convince folks the sky is falling.

On the other hand, when you’re bullish, people think you’re crazy.

When the Oxford Club’s Investment Director Alexander Green advised loading up on stocks in early 2009, you should have seen the emails he received. Several people urged his family to have him committed to an insane asylum. Fortunately, Alex remains straitjacket free.

You don’t have to be a Pollyanna to be an optimist, especially when it comes to the stock market. You just have to know history.

Four Reasons to Be Optimistic

1) This bull market is hardly exceptional. Going back to 1928, there have been 10 bull markets. The current run ranks fifth in terms of gains. And it’s still 44 percentage points below the average gain.

2) The market goes up over time. This is a vital concept to understand. One of my favorite pieces of market data is the fact that since 1937, the market has only been down seven times over any given 10-year period, for a win rate of 91%. And the seven losing periods all encompassed the Great Depression and Great Recession.

In other words, you needed historic economic collapse to not make money in the stock market over 10 years. And keep in mind that not all 10-year periods that involved the years of the Depression and Recession were negative. For example, 1933- 1942 was positive, as was 2001-2010.

3) The market is not expensive. Despite the 153% run-up since the lows of 2009, the stock market is not pricey when you look at earnings.

Over the past 12 months, the stocks that comprise the S&P 500 earned $101.92 per share, for a price-earnings ratio of 17.

In 2013, the S&P 500 is projected to earn $110.42, giving the index a P/E of 14.3

In 2014, earnings are expected to rise to $122.99, for a forward P/E of 12.8.

Historically, the average P/E of the S&P 500 is about 16.5. That means the current market isn’t cheap, but it’s hardly expensive, especially considering the average over the past 15 years is nearly 20.

4) Interest rates remain low. Sure, they’ve risen over the past six weeks, but the rates you earn from Treasurys or from cash remain miniscule. And you can still obtain a 30-year fixed mortgage for 4%. Just a few years ago, most homeowners would have given up their firstborn for that kind of rate. Housing should remain strong, which will boost the economy and corporate profits.

If you’re in it for the long term and don’t freak out every time the market sinks a few hundred points, your portfolio will be just fine. That attitude isn’t being an optimist, it’s being a realist.

Good investing,


Editor’s Note: Rising interest rates and falling bond prices have many investors fleeing for the exits. But there’s always money to be made somewhere and the coming crash in bonds is no different…

Marc’s research has uncovered a unique type of income investment he calls “Spread Trusts” that are currently dishing out yields of up to 19.6%, and could offer one-time windfall gains of 164% when the bond market finally reaches its tipping point…

To see his full presentation outlining what will happen and how to prepare yourself, click here.


Copyright © 1999 - 2013 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email:

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules