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No Comments FOMO
FOMO is an acronym for “fear of missing out which seems to be what’s happening with the stock market these days. For sure there are some very legitimate reasons for stocks to rise, reduced taxes and regulations, better business climate and refurbished trade deals and we have also reached the point that Joe Blow is gaining courage to jump into the fray too. The “pie” is looking pretty good.
There are contrary indicators that investing is reaching confused territory. Gold rose 5% in December whilst the stock market rose 3.1%. Usually gold rises as a reaction to economic doubt on the part of the public. This time it’s not the case. It would seem that the Trump economy is literally raising all boats, even the gold ones.
However, this time I think the rise in gold is a result of buying on the part of nations and central banks. I truly believe leaders of countries and central banks worldwide are worried that the Keynesian economic system they’ve base all of their decisions on leaves them less confident in building houses made of cards.
Unfortunately most of the population make their decisions based on feelings. It’s very hard to resist the lure of FOMO but being disciplined in finances is the best insurance of keeping as much of your money as possible.
So, what’s the best thing to do? I can only offer what makes sense to me so you must do your own do diligence. In short, I’m not credentialed in financial planning. With that said (to keep me out of trouble), this is what I may do myself.
First, taking some profit soon seems prudent. or more likely putting in a tight stop loss order would be a great safe guard. I personally like the stop loss approach because I “feel” the bull market may get more life pumped into it. Here I am, making decision based on feelings!
USMCA, reformed NAFTA, finalized trade deal with China, and further benefit from reduced government regulation will provide further impetus to the economy. This is why I feel good about the economy.
Cass Information Systems reported that freight shipments were down YoY 3.3% which seemly would indicate we’re headed in the wrong direction. Their 2020 prediction is a flattening of industrial output and so shipping will also flatten. 2020 will be a “yo-yo” year.
The Donald Trump Presidency has been good for the economy because he’s a hard negotiator and doesn’t like to waste money. His re-election will ignite the economy if the Republicans regain control of the House. If that happens, then the bull run will last for a while longer, in my mind as much as ten years because of the enormous amount of money that will be spent on infrastructure.
Whatever the case I remember that what ever goes up must come down and it’s only a matter of time before those socialist indoctrinated young people take over and hone their skills on reshaping America. Till then, enjoy the ride.