1Wealth Solutions Comments on the Likelihood of a Continued Bull Run

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A recent article in The Age questioned the overwhelming viewpoint from industry experts claiming the US stock market bull run that has already gone 50 months still has a long way to go.

A recent article in The Age, at the end of May, questioned the overwhelming viewpoint from industry experts claiming the US stock market bull run that has already gone 50 months still has a long way to go. Investment specialists from 1Wealth Solutions in Sydney have weighed in on the article with a timely warning for private investors.

1Wealth are best known for their end of day stock market software but have also forged a strong reputation for their high performing corporate traders. They believe there is plenty of money to be made from the stock market in the coming years but the consensus that all you need to do is buy-and-hold is not accurate.

“The market is driven by emotional and economic factors. Stock markets are simply a collection of people making investment decisions. Those people have the same emotions as everyone else. They make rash decisions, are gripped by fear of the unknown and there is definitely a herd mentality when it comes to investing.”

Partners at 1Wealth Solutions look at strategies that are flexible should the market take a tumble, “it’s difficult to predict economic factors and near impossible to predict emotional ones. Ensure your strategy is insulated against shifts in both. Because of the herd mentality, a few fears can spread quickly and a perfect market is never a sure thing”

It sounds like basic common sense, but like the article in The Age, 1Wealth Solutions are quick to point out that simple logic is often blurred by the appeal of long running bull markets. The article states that it’s “getting virtually impossible to find an expert who believes global equity markets are a risky place to invest”. The article goes so far as to say that we are living in a false economy, “If everyone believes the false economy is the new normal and the only game in town is equities, then we are setting ourselves up for a nasty correction sometime soon.”
With central banks around the globe printing money and forcing down interest rates, investors are forced out of cash into higher-yielding equities and the flow on effect is great for sharemarkets. This is the overwhelming view and is based on solid examples such as the revival of the stagnant Japanese market on the back of its central banks decision to print notes.

But what if despite the trillions of dollars in financial stimulus over the past five years, economic growth fails to emerge? Stock markets would crash, fortunes would be lost and investors would scratch their heads and gradually one by one we would remember the Global Financial Crisis and promise never to be sucked into a ridiculous bull run ever again.

Such volatility is what makes companies like 1Wealth Solutions so attractive. They may not grab the headlines but they were one of just a few companies that made money through the GFC and continued to make money ever since. Their stock market software is simple to operate and because it focuses on short term gains on individual stocks, as opposed to overall market performance, it eliminates the need to predict the future of the market. 1Wealth Partners often push the stress-free nature of their investments as one of the biggest selling points above returns. And with such uncertainty in the stock market, I can see why.

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Steve Bruebaker
PR Management Inc.
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