In March of 2011 a massive magnitude 9 earthquake hit the World's 3rd largest economy, this earthquake triggered a tsunami with waves of up to 125 feet high, and the incident damaged a nuclear power plant to the point were a 'Nuclear Meltdown' seemed almost unavoidable. In total 14,949 people were confirmed dead, 5,279 were seriously injured, and the estimated overall cost of this natural disaster is around $300 Billion dollars.
As you well know, all of our global markets are interconnected and a crisis in Europe or Japan, or anywhere else in the world will effect our US markets. But how did the S&P 500 react to one of the deadliest, most destructive earthquakes in Japan's history? From March 11, the day that the earthquake hit, to March 16, it only went down for 3 days and dropped a measly 3.5%. Now, if the threat of a nuclear meltdown and the destruction of one of the World's major economies was viewed upon by the markets as an "insignificant event", there is virtually nothing that will rile the markets, especially during the summer trading chop-fest when a significant portion of Wall Street's elite will be vacationing in their summer homes in the Hamptons or off vacationing in Tahiti.
The simple fact of the matter is that nothing will ever compare to the absolute destruction, devastation, and utter pandemonium that spread across the globe as a result of the Housing Crash and the ensuing Financial Crisis. Firms that had been around for 150 years, that had survived through the great depression, collapsed in 2008. GM went bankrupt, AIG received billions of dollars in bailouts, Citi group same thing, the VIX went up as high as 89, and there were days when the Dow Jones would make 1,000 point intra-day swings. We'd be up 400 points in the morning just to end the day down 600 points. Shares of Bank of America were routinely moving 25% from one day to another. For those of us who lived through and witnessed financial companies that were leveraged 40-to-1 destroy the XLF financial ETF, causing it to fall 82% in a little less than 2 years, everything else just seems a little quaint.
Trading and investing has become boring again. Things are neither massively risky, grotesquely overvalued, or hugely undervalued. My advise to you for this summer is, forget about the markets. Nothing of any real importance is going to happen between June and August. Just buy the stocks you love, sell the pieces of junk you might still own, and don't make another trade until September. In the mean time, if you can afford it, go out and spend every single day at the beach, travel to Europe, take your kids to Disney Land, go spend a week on the beaches of Australia, visit Hawaii or Brazil, go see Katy Perry, Rhianna, or the Black Eyed Peas in concert. Have some fun this summer! Sleep in as many hotels as you can. The market is going to be a snooze fest for the next 3 months.
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