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7 Reasons to Expect a Bear Market in 2011

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The financial media has for the most part finished their presentations of expert forecasts for the coming year. And as you’ve probably gathered, most of the strategists from the major Wall Street houses expect a continuation of the bull market that started in March 2009. Other sentiment indicators show the same picture of exuberance and outright bullishness.

These include:

  • Individual investors as measured by the American Association of Individual Investors,
  • Advisors as measured by Investors Intelligence,
  • Mutual fund managers as measured by the average mutual fund cash quote, and
  • Speculators as measured by put/call ratios.

Financial market history teaches that so much agreement is unusual and dangerous. Whenever there is unanimity in relation to market forecasts it usually pays to become a contrarian, which is what I recommend now. But not just because of all this unanimity.

There are …

Seven Additional Reasons to Expect a Bear Market in 2011


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