Modest Stock Market Pullback Creating Buying Opportunities

david-frazier

Many stock market investors were caught off guard over the past seven weeks after Donald Trump shocked the so-called political “experts” on November 8 by being elected as the 45th U.S. President.46175716

In contrast, I wasn’t the least bit surprised by Trump’s victory, as I had predicted in an article that I wrote on June 22 that Trump would win the Presidency in a Landslide.

Specifically, I predicted that Trump would get 304 electoral votes – far more than the 270 number of votes that are required to be elected as the United States’ President. He ended up receiving 306 electoral votes.

Now, please don’t think that I’m boasting about my election prediction, as I would never claim to be a political expert. Instead, I’m merely trying to point out the fact that many of the so-called “experts” are NOT experts, and that you should usually ignore the predictions made by those persons.

That’s especially true for many of the persons who claim to be investment experts. I say that because during my 30 years of investing, speculating and trading in the financial markets, I never cease to be amazed by the inaccurate predictions made by esteemed Wall Street analysts, mutual fund portfolio managers and academic economists regarding the future direction of the financial markets.

imagesFor example, from late-2007 to early-2008 many of the so-called “investment experts” advised investors to stay fully invested in stocks because, according to them, the economic slowdown during that period was merely a blip and stocks would supposedly soon turn higher.

But, when stocks were in the process of bottoming during early-2009, those same “experts” advised investors to “get defensive” because, according to them, the outlook for the economy was supposedly worsening.

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Unfortunately, many persons who listened to those “experts” got out of stocks near their bottoms, and many of those same persons failed to participate in the subsequent bull market that began during March 2009.

In contrast, I advised investors to get mostly out of stocks during September 2007 – only three weeks before the major U.S. stock market indices peaked on October 9, 2007 – and to get back into stocks on February 17, 2009 – just two weeks before the major stock market indices bottomed on March 9, 2009.509031122

Now, once again, please don’t think that I’m boasting about my accurate stock market predictions, as I, like anyone else who’s invested in the financial markets, make mistakes, am sometimes wrong in my analysis and sometimes lose money in the markets.

Instead, I’m trying to encourage you to always review the predictions and investment performance of the so-called “investment experts” before following their advice.

That being said, my research indicates that now is a good time to get more invested in stocks, commodity- and real estate-related securities, such as exchange-traded funds (“ETFs”) and exchange-traded notes (“ETNs”) that hold or track the performance of those asset classes.

imgresAnd, don’t worrying about having missed the “Trump Rally” if you haven’t already increased your investment allocations to stocks, because the recent trading action in the U.S. stock market suggests that stock prices, in general, will pull back a bit over the next few weeks before resuming their uptrend that began on November 7, 2016

Specifically, my research and investment models indicate that U.S. stock prices, in general, as well as commodity prices and real estate investment trusts (“REITs’), will trend substantially higher than their recent levels over the next 12-18 months.

That same research indicates that the S&P 500 Index will rise by at least 35% during 2017, and that several stocks, ETFs and ETNs will appreciate by 50%-100% during the year ahead.

Until next time,

David Frazier

David Frazier is President and Chief Market Strategist of Frazier & Mayer Research, LLC, an independent investment research firm that offers customized research and analytical services to registered investment advisors, hedge funds and high net-worth individual investors. You can check out his latest insights at: www.investorsmonitor.com.

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