How long will the correction last?

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Jun 13, 2006 7:27 pm

Maybe we can get some insight from you experienced guys.....any thoughts on the current market trends?  Analysis is welcome...

Jun 13, 2006 8:05 pm

correction will last until the full 10% or until the official June 29th rate hike-- AND if corporate profits continue to stay strong-- if profits hold, get ready for a whiplash buying frenzy as the mkt seems to be way oversold-


if profits head down as the fed rate heads up tho--- duck.


Jun 13, 2006 8:13 pm

I agree with Tex...market will go up after the rate hike.

Jun 13, 2006 8:56 pm

Ok, here's the bottom line. I've been in this business since 1992 and I don't have a clue where this market is headed. Yep, not one clue. If I did, I would be on a beach somewhere, with my laptop, trading market futures and laughing all the way to my offshore bank.


As a rookie, I was full of market opinions, with most of them wrong. I was wrong for 7-8 years about internet stocks and, as a result, my business suffered. Then in 1999/2000, I was right about internet stocks and my business blossomed.


As I matured from being a rookie, I gradually learned that it's much easier to simply take advantage of the bargains the market offers, rather than overpay for a stock and hope it goes higher.


I practice a form of asset allocation, but with a twist. Rather than dividing a chunk of money between 5-8 asset categories, knowing that 4 of them are probably "overpriced" (historically speaking), I'll withhold investing in the "overpriced" categories until they become more reasonably priced. 


Is this a perfect science? No, but as Warren Buffett says, "I'd rather be approximately right, than precisely wrong."


I tell clients that this form of investing can take as long as 3-5 years before they're fully invested in all the major asset categories at reasonable prices. Again, I don't know where the market is heading, but maybe we can pick-up some bargains along the way.

Jun 13, 2006 9:06 pm

who cares?  Get back on the phone...

Jun 13, 2006 9:10 pm

I am of the opinion we are in a secular bear mkt. These kind of mkts. are where we earn our keep. Pretty simplistic to expect mkt to rally after next fed hike.(17th in a row?) Valuations need to get to historic lows before next bull starts. 10X earn? Who says current P.E. is cheap? Only about at 70 yr. average.Keep in mind that some pretty smart people (Buffet/Gross) are saying to expect 5-6%/yr. for foreseeable future. With that said, RALLYS in bear markets tend to be fierce (and brief.) BTW, for all you managed money afficionadoes out there, you better darn well be prepared to explain 1-2% fees in a 6% world.

Jun 13, 2006 9:52 pm

Revealer,


With the recent correction I have gotten those phone calls with clients who are losing money on top of their fees.


How do you explain it to your clients so that they don't jump ship?


Thanks in advance for any feedback.


scrim

Jun 13, 2006 11:10 pm

Scrim,


These people probably don't belong in the market.  I have gotten 0 calls and if someoe did call me we would have that discussion only one time.  A variable annuity would ease their fears and let them earn a higher return than a CD look into it.  John Hancock has an excellent new annuity with 1.1 M&E


Revealer,


I agree we may see 6% in the US Large cap indexes in the future, we may also see 12% (who knows) if your clients only own the S & P 500 index fund please pass along my name and number and I will help them earn the 8-10% they need to retire comfortably by investing in a multitude of asset classes.

Jun 13, 2006 11:15 pm
scrim67:

Revealer,


With the recent correction I have gotten those phone calls with clients who are losing money on top of their fees.


How do you explain it to your clients so that they don't jump ship?


Thanks in advance for any feedback.


scrim


Scrim, you've just made another excellent case for the lowly VA...

Jun 13, 2006 11:42 pm

Indy,


I spoke to a wholesaler of a VA today.


He mentioned his product is simple.


They will give my client their entire principal back in five years if it's less than the original amount invested.


I was thinking that sounds like a pretty good deal until he mentioned that it must be a 60/40 allocation.


I thought the whole idea was you could be aggressive?


A 60/40 model is hardly aggressive.


scrim

Jun 13, 2006 11:56 pm

Scrim,


Interview more wholesalers talk to AIG, ING, John Hancock, Hartford to name a few. 

Jun 14, 2006 12:09 am

I am new on this forum but I have been trading and investing for a while.


I believe we have a buying oppprtunity in the Dow under 10,500 it will probably drift to 10400/10300 just to really squeeze everyone,but it should pull back above 10,700 after the fed decision. My call is not only derived from the technicals but several other factors.


1) Out of 169 companies who annouced earnings 70% of those exceeded analysts expectations  (BLOOMBERG) not an easy task these days.


2) Bonds rally, Gold falls, Oil falls, all good for equity markets(the only real fear is the hurricane/tornado possibilities for the oil)


3) Money coming out of Housing, Emerging markets and Global markets that have had a great run,where is it going to go?


SECTOR ROTATION INTO HIGH QUALITY US LARGE CAP.  The question is when? I am sure we will be tested - meaning a one day fall exceeding 300 or 400 points this would certainly kill the weak.


Then the fun begins, before then we will probably hear of hedge funds  going out of business due to bad gold or emeging markets investments - the curse of leverage   this is the norm


Just some talking points sorry to go on, It would be great to hear some of your possible scenarios.        &n bsp;         &n bsp;     

Jun 14, 2006 12:53 am
bankrep1:

Scrim,


Interview more wholesalers talk to AIG, ING, John Hancock, Hartford to name a few. 



American Skandia and Western Reserve Life to name two more...


principle guarantees are great, but not if they force the client into a more conservative allocation.  I'd pass on that annuity Scrim and look at the competition.

Jun 14, 2006 5:50 am

that sounds like nationwide's product.  i also hate the forced allocation. axa has a product, but that thing is SO freaking confusing! 

Jun 14, 2006 7:03 am
RedJacobs:

I am new on this forum but I have been trading and investing for a while.


I believe we have a buying oppprtunity in the Dow under 10,500 it
will probably drift to 10400/10300 just to really squeeze everyone,but
it should pull back above 10,700 after the fed decision. My call is not
only derived from the technicals but several other factors.


1) Out of 169 companies who annouced earnings 70% of those exceeded
analysts expectations  (BLOOMBERG) not an easy task these
days.


2) Bonds rally, Gold falls, Oil falls, all good for equity
markets(the only real fear is the hurricane/tornado possibilities for
the oil)


3) Money coming out of Housing, Emerging markets and Global markets that have had a great run,where is it going to go?


SECTOR ROTATION INTO HIGH QUALITY US LARGE CAP.  The
question is when? I am sure we will be tested - meaning
a one day fall exceeding 300 or 400 points this would
certainly kill the weak.


Then the fun begins, before then we will probably hear of hedge
funds  going out of business due to bad gold or emeging markets
investments - the curse of leverage   this is the norm


Just some talking points sorry to go on, It would be great to
hear some of your possible
scenarios.         &n
bsp;          &n
bsp;      





Good post.

Jun 14, 2006 8:27 am
bankrep1:

Scrim,


These people probably don't belong in the market.  I have gotten 0 calls and if someoe did call me we would have that discussion only one time.  A variable annuity would ease their fears and let them earn a higher return than a CD look into it.  John Hancock has an excellent new annuity with 1.1 M&E


Revealer,


I agree we may see 6% in the US Large cap indexes in the future, we may also see 12% (who knows) if your clients only own the S & P 500 index fund please pass along my name and number and I will help them earn the 8-10% they need to retire comfortably by investing in a multitude of asset classes.

Call Omaha information and ask for Berkshire Hathaway (which I own the "big" shares). Also, look up Pimco on internet and get Gross' ph.#. They'd like to hear about your multitude of asset class ideas. While you're at it, call Bob Rodriquez @ FPA (#1 multi-class fund for 15 yrs.) and share your ideas. Last I saw, Rodriquez was around 42% CASH. I'm sure he needs to put that dough to work.

Jun 14, 2006 7:05 pm

Revealer,


Bill gross is constantly bearish, he said the DOW would fall to 6500 3 years ago when it was at like 9000 remember that and alls it has doen is go up.  He just tries to scare everyone into what? BONDS hmmmmm....


Call Rothenburg, Fama, Ibbotson


Check out DFA for a lesson about the ebnefits of mutli asset investing from the smartest minds in finance:


www.dfafunds.com





Revealer:
bankrep1:

Scrim,


These people probably don't belong in the market.  I have gotten 0 calls and if someoe did call me we would have that discussion only one time.  A variable annuity would ease their fears and let them earn a higher return than a CD look into it.  John Hancock has an excellent new annuity with 1.1 M&E


Revealer,


I agree we may see 6% in the US Large cap indexes in the future, we may also see 12% (who knows) if your clients only own the S & P 500 index fund please pass along my name and number and I will help them earn the 8-10% they need to retire comfortably by investing in a multitude of asset classes.

Call Omaha information and ask for Berkshire Hathaway (which I own the "big" shares). Also, look up Pimco on internet and get Gross' ph.#. They'd like to hear about your multitude of asset class ideas. While you're at it, call Bob Rodriquez @ FPA (#1 multi-class fund for 15 yrs.) and share your ideas. Last I saw, Rodriquez was around 42% CASH. I'm sure he needs to put that dough to work.

Jun 14, 2006 7:46 pm

Peanut and TexasBroker,


Do you boys have any original thoughts or are you just repeating Skrainka's (onionhead) script?

Jun 14, 2006 7:56 pm
spikedkoolaid:

Peanut and TexasBroker,


Do you boys have any original thoughts or are you just repeating Skrainka's (onionhead) script?



who's that?



Jun 14, 2006 9:11 pm
bankrep1:

Revealer,


Bill gross is constantly bearish, he said the DOW would fall to 6500 3 years ago when it was at like 9000 remember that and alls it has doen is go up.  He just tries to scare everyone into what? BONDS hmmmmm....


Call Rothenburg, Fama, Ibbotson


Check out DFA for a lesson about the ebnefits of mutli asset investing from the smartest minds in finance:


www.dfafunds.com





Revealer:
bankrep1:

Scrim,


These people probably don't belong in the market.  I have gotten 0 calls and if someoe did call me we would have that discussion only one time.  A variable annuity would ease their fears and let them earn a higher return than a CD look into it.  John Hancock has an excellent new annuity with 1.1 M&E


Revealer,


I agree we may see 6% in the US Large cap indexes in the future, we may also see 12% (who knows) if your clients only own the S & P 500 index fund please pass along my name and number and I will help them earn the 8-10% they need to retire comfortably by investing in a multitude of asset classes.

Call Omaha information and ask for Berkshire Hathaway (which I own the "big" shares). Also, look up Pimco on internet and get Gross' ph.#. They'd like to hear about your multitude of asset class ideas. While you're at it, call Bob Rodriquez @ FPA (#1 multi-class fund for 15 yrs.) and share your ideas. Last I saw, Rodriquez was around 42% CASH. I'm sure he needs to put that dough to work.

You forgot Buffett and Rodriquez. They always bearish, too? You mention DFA. I would guess that GMO (specifically Grantham) holds their own against ANYONE in the asset allocation game. Grantham is bearish/cautious also. Point is, I am usually suspicious when someone tells me that they have this "method" to beat these GREAT minds.