Garden Growing-Why not now IV? 9.28.17

EOM Q&A:  Garden Growing-Why not now IV?   9.27.17

Today, I continue my series to answer your question, “with the strength of the current market, why not start growing my gardens now?” 

Yes, it is very tempting to jump in at these level and begin collecting lucrative monthly dividends.  Keep in mind, you will need to have the same percent run as the next pullback to come out on top.  Do you really want to risk your hard earned capital this way?

Before you hit the buy button, check out this updated NYSE Margin Chart from trusted associate Doug Short. 

Key Points…

1.  View the margin interest level (red) and how fast margin and the SPX dropped after the 2000 top

2.   View the margin interest level (red) and how fast margin and the SPX dropped after the 2007 top 

3.  Check out the current margin interest level (red). Note how much more it is than in 2000 or 2007

4.  What will happen when Institutions trading on mega-margin amounts decide to lock-in profits?

This chart alone keeps me from jumping in at these levels. 

Tomorrow, I answer your questions on the next Recession-don’t miss it!

Enjoy your day,

David O. England

Plan your work, work your plan, and share your harvest! 1 Timothy 2:1-2

This information is for Educational purposes only. It shall in no event be construed or interpreted as an offer or recommendation to buy or sell securities of any kind.

DAVID O. ENGLAND is the founder of the Eye on the Market-Training Academy and Associate Professor Emeritus of Finance. This column is presented for educational purposes only and not intended as financial advice.

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