Wednesday, May 29, 2013

Today's Market
by Dr Invest

What does today's sudden decline in the market mean? Absolutely nothing! As long as Bernanke continues his stimulus program, the market will climb; but the moment that Bernanke stops the $85 Billion of monthly stimulus, the market will immediately collapse. Not to repeat myself, GDP is only estimated to grow 2.8% in 2013. So does it make sense that the stock market would grow 14% or 16% or 18%? 

Company after company is being overvalued and the competitive valuation through stock prices keeps driving the prices up, not because of any real fundamentals but because of government manipulation of the economic markets. If an individual had done the same, they would have been sentenced to life in prison. 

Many years ago, the HUNT BROTHERS were accused of buying large quantities of silver to drive up the price of silver. On "Silver Thursday" the price of silver suddenly dropped as the market caught on to the ongoing manipulation, they were immediate set upon by the various governmental agencies, accused of varied charges for manipulating the price of silver. Yet, the government can do the same kind of manipulation, creating market bubbles that are destined to wreck the market. The Hunt's manipulation of silver, increased the price 712%. Four days after the silver market began its slide, silver lost 50% of its value. 

These kind of manipulations, whether done by governments or individuals, never turn out good. Many innocent people are hurt and in the months ahead, the same result awaits many investors. Be patient, protect your gains, this is a dangerous season and a more dangerous game. As an investor, you can;t be playing the tables, this isn't  LasVegas, the house always wins. Wait for the market to return to mean, to decline, to undergo a recession; then, you will be ready to get back in for a gain. 

(Note: the above information is for entertainment purposes only and not to be used as investment advice.)

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