From Tom Dyson, publisher, the Palm Beach Research Group: I’m reading Chris Weber’s latest report. He’s one of my favorite investment analysts. He writes a newsletter called the Weber Global Opportunities Report.
Chris’ gut is telling him the bull market may not keep going. He’s not doing anything about it, though.
He’s not dumping all his stocks or anything like that. He’s just starting to consider this idea.
(It’s the first time he’s felt this way in six years, since the current bull market started.)
One reason he cites is that he doesn’t think small investors will come back into the market for years… maybe even decades. I agree with him.
We’ve seen this before. When investors get burned by market crashes—and we’ve had one real estate and two stock market crashes in the last 15 years—they don’t come back for a long time. They get scarred for life. It usually takes a generation before you see another mania again.
So, I don’t think we’ll see a mania in either stocks or real estate for a long time. And that’s how I interpret Chris’ words, too.
The market is rising. It’s near record highs. So right now, I have to conclude the bull market is really something only the wealthy and the institutions are participating in.
And the corporations… The volume of corporate share buybacks is astronomical right now.
How much more can the market rise without small investors piling in?
We don’t have a crystal ball. So like Weber, I’m not going to make any drastic changes to our portfolios. We designed our wealth-building strategy to work in every market environment.
There are some worrying signals around. Such high levels of stock buybacks is usually a bad sign for the stock market. The length of the current bull market without a 10% correction (over 830 trading days) is another.
Bottom line: I wouldn’t be surprised if the market was unable to rise much from these levels—and maybe even be corrected by 10% or 15%—at some point this year…