American investors are about to discover how badly they are being advised by the financial services industry. I have just surveyed the various brokerage firms I routinely check to find out what they recommend. Without exception, they recommend holding stocks “for the long term”. Naturally, advisors employed by these firms are expected to parrot the same inane line.
“Are you in for the long term?” Is the worst question an advisor can pose to her client. Of course the client is in for the long term. Investing, by definition, is an undertaking with a long term horizon. But the market does not care about our time horizons. I’ve pointed this out before: during past bear markets the waiting time for a portfolio to recover losses and get back even can be years, decades even.
The primary trend of the global stock markets is down. Based on the analysis of Elliott Wave International (http://www.elliottwave.com/), the degree of trend is greater than anyone alive today has ever experienced. Their expectation is that stocks will decline 90% from here.
A calamity of this dimension is not unprecedented. Unfortunately, if you haven’t been through one, it is hard to take the idea seriously. If you own stock and want to get a handle on the risks for yourself, call Elliott Wave Int’l at 800-336-1618 and ask for the August issue of The Elliott Wave Theorist. Bob Prechter summarizes thirty years of research in this fifteen page report.
We appear to be starting a decline that should be relentless. If the forecast is anywhere near right, it will devastate stocks over the next year. It is past time for being complacent about the matter.
The author makes no representation as to the accuracy of the quoted material, but believes the sources to be reliable. No one should consider any part of this presentation as a recommendation to buy or sell any securities whatsoever.