Market Overview

Merry Monday Morning – Will Santa Come to Town?


Is it time for the Santa Clause Rally?

For a thing people seem to take for granted – they never seem to know what time (or day) it's supposed to start or how big it's supposed to be or how long it's supposed to last.  That doesn't stop the MSM from obsessing over the "Santa Clause Rally" each December and, the closer we get to Christmas – the more likely they are to claim any forward market movement to be a rally – much as my daughter used to call any old man with white hair and a beard Santa when she was five and we'd be in New York during the holidays.  

If you believe in something hard enough – you can see it.  Some call that faith, some wishful thinking, some madness and hallucinations.  There's a lot of all of that in Stock Market Technicians and the truly "faithful" are put on television and given the task of recruiting others to their cause.  Sometimes they share visions of the futures and sometimes they even show signs of the prophesies being fulfilled – and who doesn't love being shown a quick and easy way to get into heaven?  

At our PSW Conference in Las Vegas last month, we spent a lot of time extolling the virtues of slow, steady investing strategies.  While it's fun to "bet" on short-term market moves, Santa Rallies, Fiscal Cliffs, etc (whatever the fad of the moment may be) – investors often lose focus in WHY we are investing in the first place – and that's to BUILD a future for ourselves.  

There are two ways to build a building.  One way is to save up money each month, buy materials, make plans and set aside time to put in labor and keep repeating the process week after week, year after year – until the project is completed.  The other way is to save up money each month, gamble it – and hope one day you win enough to buy a building with.  The first way has a 99% success rate and lets people retire in buildings they built and earned through years of hard work.  The second way has a 15% success rate and lets people retire in buildings they lucked into.  Unfortunately, most "investors" prefer to take method number 2.   

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