Each time the market rallies, the question is asked 'Was yesterday the bottom?' Up to this point the answer has been a resounding 'No' as the market quickly resumed its downward slide after each rally. Recently, a columnist asked some Wall Street pros, people who deal with hundreds of millions, billions, of dollars every day, what they are looking for that will tell them the worst is finally over and the market is beginning to recover? Here are their responses:
Brian Reynolds, chief market strategist, WJB Capital Group
Looking for easier credit, lower rates on corporate bonds
Tobias Levkovich, chief equity strategist, Citigroup
Investor apathy, near-zero interest rates
Robert Pavlik, chief investment officer, Oaktree Asset Management
Thinks a lasting recovery is still six months away
As a dividend investor, 'finding a bottom' is not something that is essential for success. There is a lot of fear today. Many are posturing themselves in a defensive stance, moving money out of equities into cash and bonds. By most measures, many blue-chip stocks are trading at a historical discount. Are you going to buy now or pay full-price or a premium price later? Unlike the perpetual going-out-of-business sale at the local furniture store, this sale will end suddenly and without warning. Will you miss the opportunity?
Reference: Weary Investors Plead, 'Give Us a Sign!'
Related Articles:
Does This Market Have A Bottom?
Posted by D4L | Saturday, November 29, 2008 | commentary | 4 comments »________________________________________________________________
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These recent lows have spoiled me and although valuations are still cheap, I was kinda hoping they'd stay cheaper for a while :).
I don't think fear is out of the market yet and while we might not make new lows, we likely will dip again to re-test them. There's still a lot to be shook out of this market and it won't take much I think to send it downwards again. I've made some good buys so if its over I'm sad, but this past week is a reason why you stay invested in the market
Nurseb911: I have developed into quite a contrarian. I feel some sadness when the market goes up - I still want to buy more at these depressed levels.
Best Wishes,
D4L
Be careful looking for bottoms. On a truly historical scale, US markets are still not cheap. Today's P/E for the S&P looks cheap set against the last 20 years, but not particularly cheap for the bottom of a bear market over the past 100 years.
That said, I agree with you dividend investors are better off trying to dollar cost average in their money than miss some of the clearly decently high yielding shares out there.
I just see a lot of false hope. Right now emotions and hope is what I see causing the market to go up rather than facts and evidence.
This isn't over yet.