Keep Calm and Invest On

There are more than a handful of metals bugs who will tell you that “the end is nigh” for the U.S dollar, and the economy is on the verge of a substantial crash. While I agree that those things are probably true, I am suspect of the time frame people are suggesting. When it comes to the markets, what’s important is having some degree of foresight. Knowing what the future holds, be it good or bad, allows the market to compensate and thrive. It’s only when uncertainty exists that we actually see any crashes or drops.
So where do we stand now? Some people may argue the future is getting hazy with the selection of Yellen as the new chair of the Fed, but it does seem to be the case that it will be business as usual from the standpoint of the market. Stocks are continuing to rise even with the government shutdown and the current fights over whether or not the debt ceiling ought to be raised. I would argue neither of those things are a concern from an investment standpoint. Of course, if you’re furloughed it’s quite a big deal in a multitude of other facets, but as far as the price of your stocks, I wouldn’t worry all that much.
So what is the point? Well I think the metal bugs are on to something, however as I said earlier the time frame is likely off. Instead Of a six to twelve month outlook on  crash, I am expecting we’re likely about two years out at minimum. Bubbles to grow and burst and it seems we are in one now, but it does look to be in the early-middle phase and unless something truly drastic happens, it won’t be popping for a while.
This of course is fantastic news for you the investor if you’re either getting ready to invest or are already in. I expect to see some more solid gains over the next twelve months which will allow you to then pull out and have a hefty chunk of cash on hand to invest when the fall does happen. This also provides an excellent opportunity to continue stacking if you’re in metals as prices should mostly stay where they are already (or even drop another few percentage points), which allows you to be getting in near the bottom.
I for one, am not terribly concerned about the health of the market right now, given that even if the crash does come sooner than later all that does is provide me an excellent buying opportunity to get in cheap on a lot of stocks on my wishlist. Personally I would hope for around a 1,000-2,000 point drop in the Dow, as it would lead to some panic selling, which will should cut some stock prices by upwards of 30% without being a complete disaster reminiscent of the 30s. If you ask me, there is nothing more exciting than the prospect of a Black Friday sale on the stock market. Who needs a 50″ T.V. when you can buy into Coca Cola at $25/Share?
All in all the purpose of this post is that if you read my blog and subscribe to the same principles as I do, don’t panic.
Also for what it’s worth, if my education in politics and political theory has taught me anything, it’s that none of the stuff you are witnessing on the news matters in the big picture. This is strictly just political theater. The current state of affairs in the modern political landscape is to prolong these largely irrelevant problems for as long as possible to leverage votes in the next cycle (usually by claiming some level of bi-partisanship the candidate has that his/her opponent lacks). These issues (the  ceiling, etc) will continue to arise every year until the old fashioned hardliners have either died or retired. So keep your head up, its not all that bad. Keep stacking if you do that sorta thing, and just keep a watchful eye on the Dow. Till next time,
-D

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