5Reds : Intelligent Investing & Power of Compounding

2014 Stock Markets – a new Bubble?

If you listen to financial news today, most TV anchors to journalists comment on how the market is in a new high and that correction is bound to happen. They are comparing this to the 2000s bubble.

Most value investing gurus comment that they are selling most of their portfolios to turn defensive on equities. What is the fact? It is very true that stock market are on a all time high and American economy is not producing enough jobs. The Quantitative easing and low interest rates are making the stock markets go high. The economy’s growth is not as robust as the stock market.

Canada is living on a high on Real Estate. The highs will eventually tamper and Canada will face a hangover.  The only truth is that no one knows when it will be and how bad it will be.

What should you do as a main street investor whose only goal is to save for retirement or for children’s education.

The good news is don’t worry.  If you buy stocks thinking they are fine businesses, they will certainly do fine over a long period of time. If you are into the facebooks and the twitters of the world, then you better tighten your belt.

 


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