My first mini-series with Ashfordradio.com came to a conclusion on Thursday, March 8. In many ways it was an end to the beginning. As such, let me start by thanking Ashford for breaking the Lose Your Broker story and allowing me to advance the independent investor message on their network. They will always be the first media outlet to interview me and Christine Larkin will forever be my first interviewer – and also the first one to ask me if I was considering a run for the presidency. (Listen here.)
While that was flattering, indeed, I left no question that my name won’t be on a ballot this November (though I could give Joe the Plumber a run for his money in Ohio.) When Ms. Larkin followed with who I thought could beat Barack Obama in the coming election my answer might surprise you. And while I will gladly offer political opinion on any issue – that’s not the purpose for this blog area.
The purpose of this area is to acknowledge a governments’ role and function in the Market and evaluate how it relates to investment, "the market," and the course of the stock market. Independent investors require this information which I try to encapsulate here.
Independent investors must be aware (or beware) that changes in government policy indicate changes in market condition and that these changes will affect the course of investment in some way, shape, or form. My purpose with these blogs is to translate those changes into basic language with a common sense approach towards successful investment management – minus the political correctness or imposition.
Successful investment requires this kind of clarity to capitalize on the many opportunities offered by the stock market to buy low and sell high over a long period of years. That’s what Lose Your Broker is all about.
To that end, it should be understood that stock market corrections usually follow an extended period of hyper-inflation, a rapid rise in prices and valuations. Stock markets "correct" because they are over-priced as related to their underlying economy. And that’s exactly what we’re experiencing right now.
Below is a chart that compares the performance of the Dow Jones Industrial Average and the 15-51 Indicator in the three years that followed the "last market bottom" which occurred in March 2009. Here’s how that three year trend looks.
The Dow is up 79% during this timeframe and gold is up 82%. That’s Average inflation by definition: the general rise in price, as defined by the Dow. In other words, 26% per year is an average stock market return for the last three years. If your portfolio hasn’t measured up to this benchmark it is a below-average performer.
Built on a superior platform, the 15-51 Indicator produced an amazing 272% gain during this same three year period. That’s 90% per year!— three times better than gold and "the market." That’s what superior 15-51 construction does – it outperforms the Average and makes selling high easier because it’s easier to see.
Don’t be blindsided by establishment propaganda during an election year.
The stock market is over-valued right now and the 15-51 Indicator proves it. Currently trading above 60,000 points (see long-term track record here), the Indicator’s recent spike in price demonstrates what hyper-inflation looks like. That’s a signal to rebalance your portfolio – to sell high.
A buying opportunity awaits – and that’s where the real money is to be made.