As investors we should be constantly looking for new and sustainable trends in our world. Our eyes should focus on not only the newest and latest developments but on bigger, lasting impacts known in the science world as “paradigm shifts.” Historically it was these shifts that created vast new opportunities and the accompanying wealth that followed. From the industrial revolution, to the expansion of our railroads, to the creation of the production line, to the invention of the microprocessor technology, to the use social media, our world has been uprooted, displaced and replaced by the next new thing. Each breakthrough created significant opportunity for investors. Another demographic shift coming our way in its infancy today is how the baby boomers will transition as consumers over the next several decades. The ability to understand the idea and concept of “the new old” generation will be a profound shift. Let’s call it the “Growth Market of Maturing” because we never want to be referred to as old.
Oh how disappointed the bears of Wall Street must be. We started 2014 with what could only be described as the ideal set up for the often forecast, but not seen in a while, 10% correction in the market.
As the market has continued to put in quarter after quarter of positive returns, the “talking heads” on channels like CNBC have long speculated about a pull
back in the market most often defined as a 10% down movement. The pundits had a possible trifecta of sources for the negative news necessary to cause traders, portfolio managers, and everyone else that owns stocks to sell, take profits,
and see if the market could be pushed down as we started the new year. That
trifecta covered the new Fed Chairman, Janet Yellen, taking over our country’s
monetary policy, a slowing in the economies in emerging markets, and finally
the fear that corporate earnings must be slowing.