Reading the headlines should come with a warning that they can be hazardous to your health.
Or at least your blood pressure. I know mine goes through the roof sometimes.
Guggenheim Says Market a ‘Ponzi Scheme’ That Must Collapse
SMH, as they say in internet slang … “shaking my head.”
First of all, the headline was misleading. The Guggenheim partner never said the market was a Ponzi scheme. He said higher asset prices caused by loose monetary policy from central banks is like a Ponzi scheme in that it all must eventually collapse.
Second of all, I think he’s just plain wrong.
Here’s why you must be in stocks right now.
The new decade is just weeks old, but I’ve already dubbed it the Roaring 2020s because it will offer smart investors the opportunity to make life-changing profits.
I say that because of the past, the present and the future.
The past tells us that the current bull market still has a long way to go. A lot of investors are surprised when I tell them this.
The present tells us that the technology revolution is on the cusp of a new era of innovative breakthroughs and rapid changes that will reshape our future.
It will change our fortunes, too … if you are invested in stocks.
Heading into the Roaring 2020s, multiple technological breakthroughs are converging at the same time.
The mass adoption of 5G wireless networking will unleash a series of new mega-trends that will hit the mainstream.
The Internet of Things (IoT) will continue to expand as a trillion devices will eventually be connected to the internet.
Artificial intelligence (AI) will move from behind the scenes to where we cannot live without it.
The discovery and creation of breakthrough medicines will be powered by AI and genetic data, along with new biotechnology research.
Transportation will be transformed in ways not seen in decades, if ever. In fact, at the big CES show in Las Vegas [in January], my team and I heard saw companies working on flying cars! I haven’t had a driver’s license in 15 years, and if I wait a few more, a flying car will be able to take me to work and drop me off.
And then there are new technologies still being worked on that have yet to gain much attention or even be discovered.
This convergence of so many life-changing technologies will almost certainly result in stocks continuing their bull market for another 10 years.
History Is Also on Our Side
A look back yields the same conclusion.
I’ve shared the chart below in multiple places, and I probably will again. It really shows the opportunity I see coming, even as many investors just assume the recent bull market will fizzle out.
It hasn’t worked that way for the last century.
The thing I want you to notice is the most recent breakout in the Dow in 2013 – where the dark blue 14 years of “Nowhere Returns” changes to moneymaking green. This puts us at seven years into the current bull market.
If this bull market follows the same pattern as the last 100 years, that means there are still about 10 years left!
Look also at the 18 years of strong returns from 1982 to 2000. Most investors thought the bull market was over in 1990. In reality, the biggest gains were just getting started. The 1990s were the best decade in market history. The Nasdaq surged an eye-popping 794%.
Anyone who simply figured the bull market couldn’t last missed out on huge opportunities.
Selling stocks in 1989 because the bull market was “getting old” was a monumentally bad decision. The highest-quality stocks — like Microsoft (NASDAQ:MSFT), Home Depot (NYSE:HD), and Intel (NASDAQ:INTC) — climbed more than tenfold.
If we look back at the 1990s, we see a time of low inflation and incredible innovation.
If we look at the present, we see a time of low inflation and incredible innovation … and a similar set of absolutely stunning innovations converging.
Investors who rode the wave of the 1990s technology boom made the kind of money they had only imagined in their wildest dreams.
I want you to feel the same way 10 years from now.
So, please don’t miss out on 2020. It’s off to a great start and is already setting up to be one of the best years of this boom.
— Matt McCall
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Source: Investor Place