Let's put ourselves in the shoes of an investor who lived the famous crash of 1929.
This will help us a chart of the Dow Jones from September 1929 until April 1930.
Just before the crash, the DJ played the maximum of 386 pts. Just over two months later, in November 1929, were the 195 pts, down 50% from recent highs. Blanching
: Buying now? You're crazy, If you are plummeting in two months and has lost 50%!, This happened to know where to arrive within two months!
December 1929 was not a bad month. It closed at 248 pts compared to 195 at least November. Had risen a 27%! from minimal. In January it climbed another 7.5% in February and March being months also bullish.
In March 1930 our investor "Scalding" go public again. It is clear that the worst is over, and standing outside already lost too much rise.
below the chart from the crash of 1929 to 1934. We see how effectively between November 1929 and April 1930 climbed 52.3%. Enough so that many were convinced they had seen the worst.
There were other increases
important, such as took place between December 1930 and February 1931, 27.5%, or June 1931, 17%.
All of them were able to make traps for investors because the minimum was reached in July 1932, DJ 40.6 pts. A loss from highs of 90%. not see new highs again until December 1954. Waiting 25 years to reach the same level, and regardless of inflation.
Now let's take a look at a chart of the DJ today:
Surely the worst is over already? I think not. Or even go up much more would believe if other indicators do not show positive signals. True that the overvaluation of the DJ prior to the crash of 1929 is not comparable to the DJ the end of 2007, and not insinuating that will fall 90% as then. Just my opinion that it is too early to get into equities, because currently it seems that is getting worse. It is normal with such brutal falls occur equally strong rebounds, proportional to the falls, but that does not mean anything. So far, only short trading. The long-term portfolio will have to wait.
0 comments:
Post a Comment