Juggling Dynamite

Oh yes, this will work out well…bubble pricing 3.0 in stocks has encouraged bubble head financial advisors to delude themselves and their clients into believing once more (ala 2000 and 2007) that it is their astute advice and product-flogging “skill” that is “making money for clients” and to recommend this as a good opportunity to add “more equities”. And not to worry, the same crowd also believes their clients will continue to hold stocks through any downturn. See: Financial advisors see clients sticking with stocks

“Financial advisors, in a snap CNBC survey, say their clients are mostly invested in the stock market and plan to hang onto their holdings.

Fifty-eight percent of the 26 advisors surveyed said their clients are fully invested, and 81 percent said they plan to retain their positions.

Fifteen percent said the Dow crossing 17,000 gives them an opportunity to speak with their clients about adding to holdings.”

Sure…makes perfect sense. Once the value of their savings begin plunging off a cliff, people do stay calm and ride it out…no one jumps out at a bad time, and everyone achieves their financial goals riding the reckless risk bus. Of course they do.

Marc Faber, editor of the Gloom, Boom & Doom Report, sees “colossal bubble in all asset prices…the bubble may already be bursting.” Here is a direct video link.

Just to clarify, the host gets this wrong…a “correction” is a defined as a decline of 10%+. A bear market is defined as a decline of 20%+. But during secular bear periods such as we have been in since 2000, where stock valuations have reached jubilant highs such as today, a decline greater than 45% is more historically typical each down cycle.

Paul Hodges, Chairman of International eChem gives an interview at the Global Borrowers and Investors Forum 2014 discussing the deflationary weight of aging boomers and why monetary policy cannot restore demand. Here is a direct video link.