A Myopic View

January 19, 2018

The S&P 500 is up nearly 5% the first 3 weeks of the year. Following the euphoria of 2017's 20% rally in the US stock market, market participants are buzzing with the prospects of another 20%+ gain. Few people see any possibility for the market to lose money in the foreseeable future. Looking at the market the past 9 years, it is easy to get sucked into the belief there is no downside to investing.

This of course should worry anybody that has studied history. Ten years ago we were in the midst of a bear market, yet few people believed what would happen in the coming months. Most thought it was a "normal" correction and the market would resume its upward trajectory. Every drop was thought of as a buying opportunity. Panic didn't start until major banks were on the verge of failure. Even after the Federal Reserve and Government stepped in during September & October markets continued to drop.


Throughout market history we have gone through cycles like this. Human behavior causes the bubble and exacerbates the market crash. The best way to overcome a myopic point of view is to take a step back and study history. Looking at both the length and trajectory of this part of the cycle should scare anybody that believes the market can only go up.

 For over 25 years we've heard people proclaim "I don't need an advisor" during the good times only to scream "Somebody help!" when the bubble inevitably bursts. We've also learned from our own short-comings and have attempted to do a better job both educating our clients and advisors on their own behavioral biases as well as coming up with investment solutions that are designed to compensate for these biases. 


If the market continues its march higher, we will celebrate for all of our AmeriGuard portfolios as they are designed to give clients some participation on the upside. Of course when it starts to tank, we will be thankful for our tactical and dynamic portfolios which are designed to take defensive measures when the trend reverses.


Please reload

Web and Internet news concept with rss f
Featured Posts

Investment Grade Junk

September 11, 2019

Please reload

Recent Posts

March 27, 2020

March 25, 2020

Please reload

  • LinkedIn Social Icon
  • Twitter Social Icon
  • Facebook Social Icon
  • RSS Social Icon

Related Posts

Please reload

© 2016-20 Strategic Equity Management, Inc. dba SEM Wealth Management. Site created by Courtney Hybiak.

This site is for INFORMATIONAL PURPOSES ONLY.  The comments and posts published in the SEM Trader's Blog ARE NOT investment recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.  CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute

Investing in the stock or bond markets involves risk and may not be suitable for all investors. Before making any investment decisions you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists you could sustain a loss of some or all of your initial investment and therefore you should not invest money you cannot afford to lose. You should be aware of all the risks associated with your investments and seek advice from an independent financial advisor if you have any doubts. All investments involve risk including those managed by SEM Wealth Management.

Opinions expressed at www.stratequity.com, www.semwealth.com and semtradersblog.com or the previous Trader's Blog site are those of the individual authors and do not necessarily represent the opinion of SEM Wealth Management or its management. Any opinions, news, research, analysis, prices or other information contained on this website, by SEM, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. SEM will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.


The use of this website constitutes acceptance of our user agreement. Past performance is NOT indicative of future results.

***Anywhere performance of SEM's Investment Models is used, please refer to our Performance Snapshot  which contains details of the performance calculations for each of our investment models.***


There is no representation made as to the future results of SEM’s programs or if they will be profitable.

For additional information on the author and SEM Wealth Management, please see our DISCLOSURE DOCUMENT (ADV Part 2).