Investment Contrarians Financial Expert Warns: Deceptive Stock Market Setting up a Bear Market Trap

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In a recent Investment Contrarians article, financial expert and editor George Leong reports that, for the year, technology and small-cap stocks are leading the pack, with the NASDAQ and Russell 2000 up 22.2% and 16.6%, respectively. Noting that these are the biggest gains in years, Leong questions their validity. According to Leong, investors may be witnessing a set-up to a bear market trap.

Investment Contrarians Financial Expert Warns: Deceptive Stock Market Setting up a Bear Market Trap

Investment Contrarians Financial Expert Warns: Deceptive Stock Market Setting up a Bear Market Trap

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In a recent Investment Contrarians article, financial expert and editor George Leong reports that, for the year, technology and small-cap stocks are leading the pack, with the NASDAQ and Russell 2000 up 22.2% and 16.6%, respectively. Noting that these are the biggest gains in years, Leong questions their validity. According to Leong, investors may be witnessing a set-up to a bear market trap.

Leong reports that small-caps were stellar in the first two weeks of September, with the Russell 2000 advancing an impressive—yet perhaps overzealous—6.4%. The broader market, along with blue chips and technology issues, has also shown great strides, says Leong.

The Federal Reserve-driven rally has been behind the buying, claims Leong, along with some perceived calm in the eurozone, with the recently announced bond-buying program by the European Central Bank (ECB). In China, in particular, he notes that there has been a decline in consumer spending, which is worrisome to Leong because it’s the Chinese government’s prime focus.

The Investment Contrarians editor states that he continues to see expectation-driven buying based on a best-case scenario that includes the Fed saving America, a viable resolution to a potential eurozone recession, the avoidance of a “hard landing” in China, and gains in job creation and spending strength in the U.S. But, of course, Leong notes that he has yet to address the uncertainty of the upcoming presidential election, the massive national debt, and the upcoming “fiscal cliff” that some economists say will force America into a recession.

Concluding, Leong reasons: “All of these factors point to problems—the market is overly optimistic and untruthful about the real risk out there for investors.”

To see the full article and to get a real contrarian perspective on investing and the economy, visit Investment Contrarians at http://www.investmentcontrarians.com.

Investment Contrarians is a daily financial e-letter dedicated to helping investors make money by going against the “herd mentality.”

The editors of Investment Contrarians believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing and an unprecedented expansion of our money supply. The “official” unemployment numbers do not reflect people who have given up looking for work and are thus skewed. They believe the “official” inflation numbers are also not reflective of today’s reality of rising prices.

After a 25- to 30-year down cycle in interest rates, the Investment Contrarians editors expect rapid inflation caused by huge government debt and money printing will eventually start us on a new cycle of rising interest rates.

Investment Contrarians provides unbiased research. They are independent analysts who love to research and comment on the economy and investing. The e-newsletter’s parent company, Lombardi Publishing Corporation, has been in business since 1986. Combined, their economists and analysts have over 100 years of investment experience.

Find out where Investment Contrarians editors see the risks and opportunities for investors in 2012 at http://www.investmentcontrarians.com.

George Leong, B. Comm., one of the lead editorial contributors at Investment Contrarians, has just released, “A Problem 23 Times Bigger Than Greece,” a breakthrough video where George details the risk of an economy set to implode that is 23 times bigger than Greece’s economy! To see the video, visit http://www.investmentcontrarians.com/press.

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