Please explain what the future expectation was in October when hitting all-time highs. What was the "shocking" news? What triggered a fundamental shift? NEW was already out of business, CFC was already being investigated, Gold was already rallying, the Dollar was already down, Oil was already climbing. So what was the future expectation back in October? Myopia, hyperopia, or macular degeneration? Future expectations. Right. Osorico
Yes, there are many similarities between now and last September/October: stocks rallying along with record crude prices is the most obvious. Unfortunately for the bulls, this rarely plays out as a sustained rally. Day-to-day, stocks and oil appear quite random. They can rise and fall in unison over the short-term. However, in multi-week and multi-month periods, there's a strong, inverse relationship...more so than stocks/bonds, stocks/interest rates, etc.
"You need to stop thinking in terms of putting all your money in stocks or all out of stocks based on short-term timing decisions. Instead, build a diversified long-term investment portfolio spread across multiple asset classes: US stocks, international stocks, emerging market stocks, real estate, bonds, TIPS, and commodities. Forget timing and just keep your preferred allocations over the long-haul, minimising costs, taxes, and stress." you need to distinguish between TRADING and investing. trading IS timing (and risk management, game theory) etc. investing, generally isn't both are valuable. i have been investing for about 20 yrs. every month. i simply buy . dollar cost averaging. no timing, no gaming, none of that. just buy. every month. no matter what a good strategy. for the long term. that's an INVESTMENT account but that's irrelevant to trading. and my trading account.
"The market does not truly reflect the loss of overall "WEALTH" from the weak dollar. " that's because what people think of as "the market" - the indexes are indexed in DOLLARS. not "constant" dollars. but the current dollar. if you chart the indexes via a CONSTANT dollar (iow, one that accounts for the baseline dollar from the starting point of the chart), you will see a COMPLETELY different chart. iow, dow 13k in today's dollars < dow 13k-x in yesterday's #'s consider the metric . the indexes are priced in dollars. dollars float. so, yes. it doesn't reflect it. unless you normalize for dollars.
What do you base this statement on? I couldn't find any (statistical) research that supports it. % change in oil prices and stock market returns seem to be uncorrelated historically. http://www.safehaven.com/article-2035.htm http://seekingalpha.com/article/56506-correlation-of-s-p-500-to-oil-prices
I base it on this paper: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=460500 As well as a multi-week trading system I track that only uses oil price changes for buy/sell signals. It's beaten buy-and-hold with less risk as far back as my data goes (mid-1980s).