One of the things I've always done over the years is close out all my accounts just before the middle of December. Looking back on the year, I have to say it's been a good year and I hope 2014 was a good year for you too.
This is perhaps the most dangerous time of the year when the markets are very thin and volatile. They can swing dramatically one way or the other and make very little sense. It's not that way every year, but trading does drop off dramatically and liquidity becomes a problem, even with big stocks.
If you haven't made your money for the year by the middle of December, you're not going to make it in the last two weeks of December. I can practically guarantee that.
So here's what I do, I look forward to enjoying the holidays with my family and I look forward to 2015 and get mentally prepared for the markets. There is absolutely zero doubt in my mind that there will be some huge moves next year. You only need to catch one of these giant moves to make your year. I happen to think that next year will be golden - that is when the new bull market starts in gold (FOREX:XAUUSDO). Now remember, that is what I think, but I'm going to have to have the Trade Triangles back those thoughts with solid technical evidence that gold is going higher.
I also think that the six-year bull market in equities is close to or has run its course. What that means is that we should see interest rates begin to creep higher and stock prices begin to erode.
It seems to this observer that we still have to pay the piper for our sins in 2007. In my book, putting more debt on top of more debt is usually a recipe for disaster.
I guess the politicians in Washington DC and elsewhere in the world just want to have that good feeling of "we dealt with the problem and everything is okay." The reality is, they just kicked the can down the road and they're hoping to be out of office and retired before everything hits the fan.
You only have to look at Europe to see that there is zero growth there. Last week, the credit rating of France was marked down from AA+ to AA, not the kind of sign you want to see from an economy the size of France's. Let's not forget Greece, that is just an accident waiting to happen, whether it's next year or the year after it will happen and Greece will implode. You can only sell off so many Greek islands.
Asia is not doing much better, with the Chinese GDP being cut from 11% to around 5.5%. China needs a healthy world economy to grow as they have not yet achieved, by Chinese standards, a large middle class.
So if you are saying to yourself that Adam must be a pessimist, I would disagree with you and say I am more of a realist. I want to be prepared for whatever happens in 2015. Predicting the future can certainly be hazardous to your financial health, particularly if you get married to an idea and you get locked into those thoughts.
One of my strongest traits as a trader is my flexibility. What I mean by that, is simply that I do not get married to positions, markets and events change and you have to be willing and able to change with them. If you don't adapt, if you don’t change with the times and the markets, you don't survive, it is just that simple.
There is a way to survive and thrive in 2015
Whether its MarketClub’s Trade Triangles (that’s what I use) or some other simple approach, let the market tell you what it wants to do. Politicians can lie to you, governments can lie to you, but the market action tells you the truth and that is the key element to success, in my opinion. Go with the flow, go with the trend, do not try and fight the markets because they are bigger than you and you will lose.
As I mentioned at the beginning of this post, I am preparing for 2015 by relaxing with my family, enjoying the holidays and openly looking forward to all the opportunities that I see next year.
Here's my question to you, what are you doing to prepare for 2015? Let us know with your comments below this post. I would enjoy hearing from you with your ideas on the market.
Every success with MarketClub,