Are Bull Markets Supported By Rational Growth in Stock Valuations?

Introduction The word "rich people become wealthy" is a motto the American listens to and is immediately linked to capitalism. People are very clear when the domestic stock market index rises or falls, as the US financial markets headline every day. Given the wide distribution of information on stock market performance, it is easy to create a lot of excitement during the bull market. This is widely defined as a trend of stock price rise. Whether propaganda and excitement surrounding the bull market will further raise the stock price.

As the average bull market lasted about four years, the US stock market continued to rise for the past nine years, becoming the second longest bull market in US history. This and many other valuation signals - prices and revenues, stock valuation and GDP - make the burden on the US stock market very obvious. I achieved this goal last November, immediately sold all my US shares and invested in US Treasury bonds, international market bonds and emerging market stocks. But two months ago, I began to feel uneasy about the stock positions in my emerging markets. Normally, whenever there is a problem in the US stock market, emerging market shares return from the overseas (usually emerging market) investment funds to restore the portfolio's portfolio's balance and a more depressed developed market Gain assets. I deposited money for this transaction with the Gold ETF. When refilling the tank gold usually rises

Growth stocks generally perform better than other stocks in bull market, but there is a possibility of going into bear market. Investment in growth has several dangers. If sudden revenue growth stops, investors are betting a lot of revenue growth to keep growing, so stocks may be very difficult to fall. Because growing stocks are often highly valued, negative news sharply declines. In CEO 's earnings warnings or statements, revenues are growing at a slower pace and are sufficient to hurt investors. Strategies based on growing stock investment will not direct investors to sell until it is too late.

The stock market is experiencing different length cycles supporting growth or value strategies. The stock price of the Russell 1000 year growth index exceeded the Russell 1000 index of the current bull market which began in 2009, but it is not so. Value in 2016 will exceed growth. What should investors do? John Augustine, Chief Investment Officer at Huntington Bank, proposes to invest in both strategies. Together, they add diversity to the fairness of the portfolio and provide the possibility of return when any style is advantageous. Splitting 50 - 50 also helps investors avoid the temptation to follow trends. "This is very important as consistency is the key to 401K investment."