The Trend is Your Friend…….(Until it’s Not)

Looks like this will be a week of sayings (i.e. earlier Elephants dancing)…so we are running with it. A very popular saying that you may have heard of is also “The Trend is Your Friend”

On Wall Street this old saying is used frequently and while we certainly give it credence, heck we are about to show an example of it, we liken it more to greater fool philosophy (a greater fool will always buy it higher) than actual meaningful investment.

Here is a trend to behold: The Russell 2000, A Small Company Index

This is an almost 7% move since 12-31-12. We feel certain we are not going to have an annualized return of 96% (7% times 12 months.)

This sure looks great, and without hardly a pause. Unfortunately it just does not work this way…at least permanently.

We are most interested with what changes this most recent trend, not IF it will change (It Will!)

For now, “The Trend is Our Friend” UNTIL IT IS NOT!

Have a great day…not trying to be negative, just keep the perspective.

JK

PS Friday brings another fun saying that will explain why it’s not a good idea to go “All In”