Wisdom and Markets. (in that order)

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I, along with a lot of people have been searching for answers to this question: Why, in the face of many financial/economic headwinds, has the stock market been on an unrelenting move up? With no clear conclusion, I decided to wander the dessert for 5 days, seeking wisdom. In my travels, I interviewed locals (see picture below), analyzed the stars, studied charts and finally landed at the LPL Financial – Masters Conference in Scottsdale, AZ (well, it is technically a desert).

Blog 5 - Market Momentum - 1-150919.pagesThe guidance I am bringing back is based on information gained from the presentation of Burt White, Managing Director-Chief Investment Officer for LPL Financial. I will share my new knowledge through these questions:

  1. If buy low/sell high still holds true and the market appears to be near the top of its current trading range, doesn’t it make sense to take some profits?
  2. If the Fed is putting $85 billion per month of liquidity into the market, how could the sequester of $85 billion year of cuts really have that much impact?
  3. Even if you argue that the $17 trillion of debt is manageable now, what happens down the road, when interest rates go up? Can this story have a happy ending?

And the real question that I sought an answer to…

As the market is at all-time highs, are the key economic statistics also at all-time highs (or even where they were the last time the market was here) or is this market on Fed Red Bull?

Consider:  The longer the party, the worse the hangover. I welcome comments/answers to these questions in my quest empower people to love life to the fullest.

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