No one really has any idea what's going on.
It happens every time there's a pull back or downturn in the market. The financial press yet again (using Monday morning quarterbacking) anoints the "visionary investment guru" that predicted the correction in his or her newsletter or CNBC interview or Wall Street Journal article and saved their clients countless thousands of dollars. Well let me tell you, Dear Reader, if your investment guy or gal tells you they can predict when the next correction will occur, my advice is to RUN. Take your money and RUN from them. Even if you graciously assume that their advice is sincerely based on good intentions and wanting to save you financial pain, the level of vanity and hubris displayed by them in saying they can predict the market is a very dangerous thing when it comes to managing other people's money. They themselves may be blinded to their own fortune telling inadequacies by their hubris.
Here's a little bit of truth: With hundreds of thousands of investment gurus out there, be it in the local branch of your national retail investment store chain, or one of the many talking heads on the financial news channels…. one of them is gonna get lucky and pick the exact date the correction begins and how far the market will fall. Funny though, that guru won't be identified until well after the correction has happened… (See Monday morning quarterbacking referenced above.)
So Bink, if you think any opinion about when this Bull Market will correct is bull$#%+, why are you even writing this article? Because I want to try and give value to you who exchange a commodity to read this. That commodity is the most valuable in the world. Your time.
Let me state plainly: I have no idea when the next correction will take place. Nor whether it will be a correcting dip of 5%, 7% or more then reverse to achieve new highs. Nor whether it will be the start of a prolonged bear market with a true downturn of 10%, 20% or more. I do suggest that the investor who would be successful should think about these truths:
From the start of this bull run in March of 2009 through September of 2013, there have been 11 corrections of 5% or greater. With another 4% correction in October, 2013. These continuing corrections remind us that this continues to be one of the most "nervous" stock market recoveries since WWII. And while the corrections have been decreasing in percentage depth, they appear to be happening more frequently.
At 4.75 years, this bull market is already one of the longest since the Great Depression. Since 1932, the average bull market duration (for the S&P 500) is 3.8 years and. So in comparison, this one is getting a little long in the tooth.
My final thought on this matter is that when you start hearing those talking heads and investment gurus begin asking that with all our new technologies, efficiencies in the markets and investment products and our powerful, "wise" leaders at the Fed and in Government, have we "banished bear markets forever?" or something to that effect.
That, my friends, is when we know hubris has truly run amok and we, in turn, should run our investments to the sidelines.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: The contributing author, Binkley Wealth Management Group, LLC, and/or its clients may be pursuing the strategies and may or may not hold positions in securities mentioned in this article at the time of publication. The opinions and strategies expressed are not meant to taken as advice to any individual investor. The opinions and strategies discussed are not to be construed as personalized recommendations to buy, sell or hold securities by any individual investor without first consulting with their own personal financial advisor.