My old friend; here we are again; the market has a correction and the world is ending. I'll hold my switch from bull to bear until I see it happen. Meaning S&P 1880 breaking down completely.
10% market corrections are normal. The last time the market really became a bear market was 2002 & 2008. That's since it became a freely traded computer market and retail unsustainable climbs started . Who knows, maybe 6 years will happen for the third time in 2016 and a new market pattern will begin. But the catalyst your posting about the past year or so doesn't seem to have effected the market more then just corrections so far and the interest rate has been null since the 2008 crash. One would think if that would cause the sky to fall, it would have by now.
Once again I say we'll see. But I'll hold off on switching from the bull to bear camp till it happens, as always.
One thing I'd like to comment on, in your post is your long hold portfolio. May I suggest including some REITs, if you don't have any. It seemed your attitude is hold blue chips and eventually they will come back and give you a good retirement. Well a few 10 to 15% REIT's will produce income while waiting. The lower a divvy stock price goes, the higher your ROI is. And those funds are realized while the market falls, and your waiting.
Example: I hold NYMT and my basis is producing well over 15% now. The price loss is about 15% before this resent correction, but I get 15% each year and won't sell until the market price climbs to a profit area. (if ever) REITs will feed me, while I wait. With out large divvy stocks in my long portfolio I'd just be waiting. See the point!
Some say REIT companies will lower their divvy during bad business return days. And that's normally correct. But lowering a return from 15% to say 10% After 3Q's of lowering dividends in steps will always be better then what .5% CD's give or long stocks portfolios in dive status provide, in bad markets. My price gain paper loss may event get larger then my divvy return. But if it's a hold what matters is what I get, not what the size of a paper loss. Especially when you hold long, you hold long.
When one thinks long, think REITs IMO.
As for this correction to 1880 as I expected. My swing position in FAZ is a great play right now. Today's stall candle was a very strong candle with nice volume. If a bounce follows and this is a correction, not crash. I'll be selling @ 1850 after 1st resistance is broken. If there is NO bounce, my gain will continue to increase.
FAS/FAZ is a great way to play bad markets or fluxing markets. And no need to short using a margin account. I love FAS/FAZ.
