Recent weeks have seen some volatility return to the markets. While it has taken some bark off for a few, the recovery in the market – both quick and decisive highlights that these pullbacks are merely a way of shaking out the uncommitted or nervy types.
It looks like we are only 6 years into an 18 year bull market
Looking where things stand, the stock and housing market looks set to rise steadily over next 12 years. That being so, we are already 6 years into an 18 year bull run, and here is s why:
No one is expecting it
Over the past decade, one of the irrefutable facts – observations if you will, from being in the trenches day in and day out is, that markets have a tendency to do what everyone says they won’t!
Things are tough out there and you would need to be blind or naive not to see it, but how to profit from it is the key…
Post GFC, the job market has been tough, automation, technology and robots etc, are not creating as many jobs as they replace. More than any single area, this is challenging the prospects of the once “robust” career path of the middle class.
There is at least one safe haven….
You know, it’s funny when you hear the same thing from several sources at the same time, it’s often worth looking into. Last night, reading before bed, this same thing came up AGAIN, an area that is charging and will likely charge further – healthcare. With the population curve the way its going, this will be a likely strong performer, as we live longer, lower quality lives with the various maladies that come with age – Cancer, Alzheimer’s and Parkinson’s, just to mull over!
Get past the headlines as they often don’t do anymore than reel you in…
SARS, G20, Iraq, ISIS, terrorism, deflation unemployment! Hardly any more chirpy than the prospects of Alzheimer’s or Parkinson’s diseases. However, the reality is there is a whole swag of great stuff going on for those that get past the headlines.
The number of beneficiaries will fall but those that do benefit will make a lot more…
The sad part of this latest bull-run will be the widening gap between the upper and lower ends of the middle class. Those with two houses will collect a third, those with none will have to settle for a unit.
Want to know what will end the bull run?
One thing we are watching very carefully for, as a potential leading indicator, is a burst in unit prices in city centers – not housing as a whole. However the burst in unit prices will be enough to create tough times, the sort of tough times that my generation has never seen before.
But that’s a few years away yet.
Today, if you lined up 100 random Australian’s here’s what you’d typically find: 30 happy, 30 peaceful, 22 anxious, 11 sad, 4 angry, 3 powerful.
These are the attitudes that will be making the real investing decisions going forward. As a side note, see why good leaders are so hard to find in society!
There are huge positives especially from the GFC
One of the best things to fall out of the GFC was that successful businesses were groomed for excellent growth, inefficiencies and bloated costs were weeded out, excess work forces trimmed and borrowing costs were made cheap for the short term.
As for the past 6 weeks – well market pullbacks to the longer-term trend, those on monthly charts, are all part of a healthy trend.
It’s not often, in fact never, do we plead with investors; after all we all have a choice….
However, please don’t let negative press cloud your ability to see positive opportunities all around you in this moment. Regarding Australian property, remember that ‘everyone else wants what we’ve got’, meaning investors in other countries see Australian property as a good long-term hold.
Or look at it all in reverse, it’s been 8 years since property prices sharply moved, in most areas of Australia, and the price of everything in the supermarket has gone up a lot in that time – there has been inflation – isn’t it time for property to do the same – and when it does, the stock market will follow suit.
Want to chat with Greg directly about how to capitalize on this? CLICK HERE