Statistics. Just because something happened, has little to no bearing whether it will happen again. One occurrence is completely irrelevant. 30 occurrences is usually considered the bare minumum for an event to have any predictive value on something else.
I don't think anyone can possibly understand the impact of the Feds inflation on the market indexes versus crap economic fundamentals that will persist for as long a Obama and gang is in charge The stock indexes are an illusion. Kudos to anyone who can steal from the thieves at their own game I for one am just Looking for real comapnies with real products and real divdends that have pricing power to ride the inflation wave.
It's a 1987 repeat, stangely enough the same person has been called to action, Mr. Volcker. As soon as longer-term interest rates start picking up - and there are signs of it already - money will flow out of bonds. The FED will be forced to raise interest rates to keep interest in financing the huge debt and the market will either plunge or even crash. It is a replay of a movie. These politicians cannot escape making the same mistakes over and over again. The issue is not whether there will be a plunge but when. S&P 500 may rise to 1100 before plunging back to 700. Then it will stay low for several years. This is a very plausible scenario. Use tight stops.
The 1987 crash was a great investment opportunity. More or less the beginning of the great bull market. I had met with my investment guy the day after the market had collapsed and when he told me the market crashed I was thrilled. I told him I could buy more shares cheaper. I had only been investing a couple of years then, and I could have cared less. But of course now I am much more concerned with a daughter in college and one in high school. Volker had just left the fed a couple of months before the market crashed so who knows why it crashed then, maybe insecurity, or perceived risk, or maybe it was just a little overheated. What I believe we have now is going to be more similar to Japan. Investing in the foreseable future is going to be a zero sum game. This is more similar to a depression. Every day I hear about a neighbor or someone's spouse getting laid off from work. Much more lately than a year ago. I agree that interest rates going up are going to be very hard on the markets and our fed is going to try every trick in the book to keep that from happening. But in the end the market will set the rates based on real risks, and there are plenty of them.