Markets Stay Irrational Longer Than You Can Stay Solvent

If you have a strong feeling the market is ahead of where it should be, we think it is correct. There is an old traders expression: “The market can stay irrational longer than you can stay solvent, so do not bet against a market trend.”

Indeed, this stock market is being artificially inflated by the Federal Reserve and other historically large government stimulus, pushing us further up than any of us are comfortable with at this point. The good news for investors is that the Federal Reserve has articulated that they will keep all of the stimulus in place through at least 2022. While the fiscal stimulus passed by Congress is set to runout over the next few months, they have publicly discussed extending the stimulus. Given it is an election year there is a high likelihood that they will do everything in their power to prop up this economy before voters pull their levers in November.

As mentioned last week, the market internals (breadth, volume, sentiment) all continue to look strong.

 scoop markets, written by professional economists and investors with backgrounds from leading Wall Street firms, breaks down the complexities of the stock market and economy into easy access, digestible morsels. You're busy, but you care about your investments - and it's exhausting keeping up with the stock market.  We solve that problem.  

If you don't like our newsletter, please unsubscribe at anytime. Seriously, no hard feelings.


 Get the weekly email that makes keeping up with the market actually enjoyable. Stay informed, for free. 

© 2020 scoop markets. All Rights Reserved.