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The 6 reasons for a bear market

By AD follow AD   2013 May 18, 4:56am 1,830 views   1 comments   watch   nsfw   quote   share    


1. Tight Money - Fed is flooding market with cash. QE3 is ongoing with $40 billion in monthly mortgage back security purchases and treasury notes buys

2. Rising Rates - 30 year mortgage and car loans are dirt cheap. Look at 3 month Treasury Note at 0% ! Rates are very low, until unemployment hits the Fed Reserve target of 6.5%. Likely they will start backing off on QE around 7% unemployment.

3. High Inflation - government reported inflation is low (i.e, CPI) and gas prices are around $3.45 nationwide compared to $4 back in summer 2010

4. Rapid Growth - GDP growth is currently moderate around 2 to 3%

5. Over Valuation - p/e ratio (trailing 12 months) is around 19. When Bob Brinker said in May 2010 that stocks were not over valued, the p/e ratio was around 17.

6. Individual Investor Sentiment is bearish - it continues to be bullish for at least a 6 month period, see www.aaii.com/sentimentsurvey

#housing

1   AD   ignore (0)   2019 Feb 26, 4:20pm     ↓ dislike (0)   quote   flag        

The S&P 500 p/e ratio (trailing 12 months) now is 21.43. Source: http://www.multpl.com/

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