I am VERY concerned about what my indicators are telling me. The GMI=0 now that QQQ has closed below its 30 week average (see chart below), as have 3 of the “Magnificent 7” that have held the indexes up this year: AAPL, GOOGL and TSLA have faltered. I remember the nifty 50 large cap stocks in the the 70s that the market pundits asserted you could buy and hold forever. They crashed beginning with the bear market in 1974. Anyone hear about Polaroid or Eastman Kodak anymore? Now we have the Mag 7, which because of their huge market caps, drove the cap weighted indexes, SPY and QQQ, higher while obscuring the fact that many of their component stocks languished. Look at the Dow, down for the year, in comparison. Now the Mag 7 are weakening and so will the market indexes. Over my investing life, since the 1960s, it was my generation of Boomers that drove the economy and the market. Now with many of us nearing retirement and dreading relying on selling our investments to live on (remember RMDs) we will abandon stocks and mutual funds to hold safer investments like short term treasuries, CDs and high yield savings accounts. If that is the case, we might be on the verge of a decade long stall in stocks. Think about it.
My indicators look the way they do before the major decline gets going. So, I am out of almost all equities in my savings and retirement accounts. I typically retreat early. How many Boomers are going to join me over the next decade? It will likely take very low interest rates to entice Boomers to assume market risk again.
The GMI=0, no time for stocks.
Thank you. I really appreciate your insights
Excellent points. As a retired Boomer myself, I am in Treasuries, do very little stock trading, and very satisfied with my 5+%. Why get whipped by algos every day when you can do other things with your time? A whole new era of higher rates for longer is here. Thankfully we have lived to enjoy them.
Perfecly encapsulates the Boomer generation. Send interest rates to 0 prior to their retirement. Stock market rips bc of low interest rates, then when they retire, jack up interest rates now so they can sell out, put it in Treasuries @ 5-6% and enjoy the fruits of others labor while paying a pittance for Medical care and leaving their kids to handle the growing 40+ trillion of debt.
This post basically marked the bottom, and you were very concerned about the future. In the trading week to follow, it was the best week of 2023.