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Tuesday, August 25, 2015

Every eight years!

If you look at this historical Dow Jones Industrial Average chart going back to the 1980s, some frightening patterns stand out. Every eight years there's a big shakeup and the value of these stocks is cut in half. We're now in the eighth year once again. My prediction is the DJIA drops by half in the next couple of years and reaches its bottom at about 9250. It's also interesting that it coincides with the election cycle of a new president each time. Notice the tranquil easy pace from 1970 to 1995? That's 25 years of nothing much happening. Then all of a sudden in '95 the DJIA takes off. That's also when all of a sudden average joe could invest in the stock market all by himself using a computer. Without the requirement of sending every trade through a broker, the world jumped into the stock market. And it soared! But with all the people buying and selling came a never before seen degree of volatility. People fear change. They fear uncertain tomorrows, and apparently they fear having their money in the stock market when there's about to be a new president of the United States.

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