So the markets are falling! This is not 2008, 2000 – 2002 or 1987, so remain cool, calm and collected. To do this, keep perspective. How do you do that? Take note of how the markets move over the long term.
We were due for a retracement…
The retracement from the High Close on January 26th to the February 5th Close on the NASDAQ is currently 7.17%.
This retracement has been widely discussed since Trump took office, but nobody knew when it would occur. Well here it is!
The question now is how deep will the retracement be and how long will it last? Nobody knows for sure, but we can use history to get a pretty good idea.
Many have said that the markets, particularly in the US, have been euphoric and that the end of the nigh on 9 year bull market was imminent, which would initiate another multi-year sideways and down market, such as between 2000 to 2009.
I strongly beg to differ.
Firstly, we have not yet experienced euphoria, well certainly not the type that ends Secular Bull Markets.
Secondly, big picture market technicians will know that this Secular Bull Market is nearly 5 years old, not 9 years old. See why in the market analysis webinar below.
In this recording of a market analysis webinar that I did in October 2017 for Share Wealth Systems clients, you’ll clearly see that a Secular Bull Market started in April 2013 and that there is a fairly high probability that it could last until 2026 or even 2030 with significantly more UPSIDE.
You’ll see why you should remain cool, calm and collected right now and why you should set your investing up for what may be a once in your lifetime investing opportunity.
That is, take advantage of the rises but protect against the inevitable falls – especially the final big fall whenever it eventually comes.
And you’ll also see that retracements of between 7% to 18%, even 25% happen during Secular Bull Markets. In fact, during this Secular Bull Market since 2013 we’ve already had a 14% retracement in 2015/2016 on the DJIA and S&P500, and an 18% fall on the NASDAQ.
That is, what is happening now is normal market price movement. Especially for a long-term Secular Bull Market.
See why and how: WATCH NOW
What to do about it…
Stick to your investing process according to the Investment Plan that you have written for making your investment decisions.
Follow the pre-defined and objective exits that may occur now. Embrace the pre-defined and objective entry signals when they inevitably occur over the next few weeks.
Your Investment Plan should be designed to keep you executing consistently and objectively – it is most needed during times of adversity to help you “keep your head when all those about you are losing theirs”.
Indeed, you don’t really need your Investment Plan when the markets are rising…
Don’t allow short-term volatility to detract you from your long-term plan…
Be aware that the commentary “noise” will ratchet up in coming days, maybe weeks, and the doomsayers will pop out of every nook and cranny.
Have a mindset that, despite the fall in your account balances, embraces this retracement. See it as the breather that the markets need to gather energy for their next run-up.
Remember back to how grateful and positive you were 2-3 months ago when your account balance had probably risen strongly to a high value, but that was a lower value than it is right now.
Existing Share Wealth Systems clients should watch the eUGM recording that I did last Thursday, February 1st, if you haven’t already watched it, to get an update on the October webinar that I did.
Here’s the link: WATCH NOW
A picture of perspective…
This chart of the NASDAQ from 1995 to 2000 shows 13 retracements of between 7% and 29.6%, with 7 of them between 10% and 17%, leading up to the last euphoric market thrust in late 1999 into early 2000. A period in which the NASDAQ rose around 600%.
Despite showing this end-of-Secular-Bull-Market period to make my point about market retracements, my technical view with the data currently at hand, as per the market analysis webinar mentioned above, is that the current Secular Bull Market is in it’s first 5 years, not last 5 years…