After a strong move upward on Thursday of last week, when the Dow Jones Industrial Average rose an impressive 490 points, momentum has virtually stopped, as the Dow inches towards a point in which it can’t hold – 12,200.
When you look around it’s easy to see that nothing has changed. Europe is still a mess and close to another downgrade; the U.S. is sending mixed signals in response to it (first our Federal Reserve will help, then it won’t, then it might, then it will but not like this, that, or whatever); and politics is trumping solid monetary and fiscal policies.
Why should the stock market keep rising – and why should gold stop?
Interestingly enough, central governments around the world bought gold in droves during the third quarter of this year, investing in the precious metal at levels not seen since the last “financial crisis.” Governments do this to add value to their currency, which they’ve been printing like it grows on trees. That, too, adds to the gold surge.
And who cares about this recent Dow move. It’s just a blip on the radar screen. The Market is still broken and until central governance fixes it average stock market returns will remain under flat-line conditions (therefore, not making money,) above-average portfolios will outperform them, and gold will continue to soar. In other words, current trends will continue.
As I’ve blogged prior, free market fixes are the only way to prosperity. So long as the Market remains broken, volatility, speculation, and illogic will rule the day. I caution you not to get sucked into the hype. Everything is clear with a long-term view.
One more side note: the vast majority of all mutual funds fail to outperform the DJIA. Your stock portfolio must outperform it in order to build long-term wealth. That’s easy to do with the Lose Your Broker method and my patent-pending 15-51 portfolio builder. Try it out and see for yourself.
You can do it!
I’m just sayin’…