The Market-How High is High?
Remember the Crash of 1987, the S&L and Commercial Real Estate Crises of the Early 90’s, the Bursting of the Internet Bubble in March of 2000, 9/11, the Closing of the Markets for Two Weeks, the Ensuing 2001-2003 Recession, the 2008 Financial Crises.
Has a Pro Business President Who Says he is 10 Feet Tall and Can Shoot Lightning, Combined With a Treasury Secretary by the Name of Steve Mnuchin Who is a Hedge Fund Pro, Created Expectations so High They Cannot Possibly be Reconciled With the Markets Valuations?
Crashes Seem Like They Come Out of Nowhere. In Reality, the Pressures Build Over Time.
Is This the Case Now?
Maybe, Maybe Not. Perception is Reality. Bubbles Can Build For a Very Long Time Before They Burst.
As Long as the Markets Believe Valuations Can be Justified by the Underlying Fundamentals the Indexes Will Continue to Rise.
The Most Recent Example. Passage of Tax Reform. Despite the Fact the Tax Reform Law Adds to the Deficit.
Just Remember, if the Markets Get to Far Ahead of Themselves, What Goes Up Will Come Down. We Have Seen it Before and We Will See it Again.
Not to Mention the Prospect of Geo-Political Tensions.
How, When, If and What the Catalyst Will be is Anyone’s Guess.
But, Given Trump’s Teflon Political Image, Where His Electorate Supports Him Based on How He Makes Them Feel, Rather Than What He Does, the Only Thing That May Be Able to Bring Trump Down Would be a Fall in the Nation’s Wealth Precipitated by a Decline in the Markets.
Remember George W. Bush.
Losing Money Never Makes Anyone Feel Good.
The Article Below Will Provide You With Some of the Evidence and Metrics Which Support a Cautious View.
In the End, You Will Have to Develop a Framework and Philosophy About Where You See the Markets Heading and How You Will React If Your Right and If Your Wrong.
Let Us Know if We Can Help.