Thursday, August 4, 2011

Bear or Bull?

The DJIA has slid over 686 points from July 5, 2011-Aug 3, 2011. That's a huge 5.45% drop for the DOW.

The question becomes: are you a bear or a bull?

The bears could easily point to the fact the U.S. government only narrowly missed a default on its obligations. Although the U.S. is currently going to retain it's coveted AAA credit rating, there is the threat that it will be downgraded next year. The deficit is going to be cut by $2.1 trillion over the next decade instead of the $4 trillion the credit rating agencies were looking for. The Eurozone is mired in debt and unpopular austerity measures. Greece and Ireland are going broke. Consumers are not spending and the housing market here in the U.S. is wobbly.

The bulls have a fighting chance. The worst seems to be behind us and a lot of investors are confident that the debt concerns in Europe are overblown. The market drop has provided an opportunity for long-term investors to purchase their favorite equities on sale, relative to their trading prices just one month ago. Many blue chips are reporting strong earnings. Some markets may have seen a bottom to the housing drop. A true bull will be greedy when others are fearful. This is one of those times.

Personally, I'm a long-term investor and I plan on being actively invested for the next 40 years. I believe 10-20 years down the road this will all just be a blip on the radar. Because of that, I'm a bull.

What about you? Bear or Bull?

Thanks for reading.

This article was written by Dividend Mantra. If you enjoyed this article, please consider subscribing to my feed.

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