A Correction Is Coming – Bloomberg 07-07-14

Salient to Investors:

Barry Ritholtz writes:

  • The market’s various new highs are bullish.
  • Corrections are normal so should not be feared: since March 2009, we have had 9 corrections from 6-22 percent.
  • Corrections are impossible to forecast because people are terrible at making predictions and we don’t know what the economy is going to do, or where interest rates are heading.
  • No one times the market especially well, aside from costs and taxes.
  • Confirmation bias is where we find what we are hoping or expecting to see and we give it undue weight in our mental models, and affects bears and bulls.
  • Longer-term investors should look at a correction as an opportunity to re-balance.

Read the full article at http://www.bloombergview.com/articles/2014-07-07/a-correction-is-coming

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