The Current Bull Market – an Opportunity for Huge Profits

Bull MarketIt would be a sheer understatement to say that the stock market has been on a tear. The Dow Jones Industrial Average (DJIA), up1.56%, reached 21,000 on intraday trading for the first time in its history on Wednesday, March 1, after catapulting 300 points. And the S&P 500 SPX, the Nasdaq Composite, and other Wall Street indexes also surged to record highs in the last few days.
The fact that financials, up 3.1%, led all sectors in gains comes as no surprise. In her mid-February testimony before the House Financial Services Committee, Fed Chair Janet Yellen accounted for the explosive market by remarking, “I think market participants likely are anticipating shifts in fiscal policy that will stimulate growth and perhaps raise earnings ….”
In other words, Ms. Yellen is giving polite lip service to a financial explosion that, in just a few weeks, has more blatantly come to be characterized as the Trump rally. The nation expects the new President will unleash a host of pro-business initiatives: a cutback in individual and corporate taxes, more permissive banking regulations, and accelerated spending on infrastructure.
While his February 28th speech before a joint session of Congress was wildly optimistic, it was short on specifics. Nonetheless, Wall Street has become perhaps the Chief Executive’s biggest cheer team.
Some analysts, though, like Andrew Adams at Raymond James, take a soberer view of so-called Trumponomics. He feels that the market is simply breaking out after what has been a difficult couple of years for the economy. Now some companies are reporting increased earnings, which also helps explain the persistent bull market.
Also, some insiders like New York Federal Reserve President William Dudley estimate a greater than 70% chance for an interest rate hike. Coupled with President Trump’s economic initiatives, a hike in interest rates is likely to bring about an increase in inflation.
In a subtle way, then, Janet Yellen’s recent testimony before the House Financial Services Committee could very well be acknowledgment of President Trump’s clarion call.
If indeed Andrew Adams and other analysts are right, though, and the re-energized bull market is more a function of market forces than it is of the administration’s touted promises, equity investors would be well advised to remain alert to financial history.
As with most investments, what goes up invariably goes down. Just ask veteran stock market observer Marc Faber who, a few days ago, remarked the market is “way too bullish” and “vulnerable to a seismic selloff.”
Curiously enough, Faber is a Trump supporter. But he also happens to believe one man alone doesn’t have it in him to turn things around and “make America great again.” In fact, in his February 26 CNBC interview, he told the reporter “Trump, unlike Mr. Reagan, is facing huge, huge headwinds — including a debt to GDP that is gigantic, as it is in other countries.”
How then should you approach investing? Well, if you were fortunate enough to get in on the burgeoning stock market early enough, you might want to take some of your earnings off the table. From this point on, anemic valuations could go against you; and if Faber is right, your losses could be precipitous and substantial. Depending, of course, on what stocks you choose, buying is now a riskier enterprise than it would have been, say, two years earlier.
Doesn’t it make sense to buy some portfolio insurance? Historically, there’s no better insurance than gold – physical gold. At its current price, many industry observers consider it a bargain.
Request more information now or call 800-777-6177 now, and ask to speak to a Fortress Gold Group representative.

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