Tuesday, July 28, 2015

AN IMPORTANT LESSON FOR INVESTORS......ANOTHER PESKY FACT!

AN IMPORTANT LESSON FOR INVESTORS

There is a salutary lesson being given right now to anybody who invests in Western markets but few are paying attention. If the penny drops, things could get very ugly indeed.

Everything... EVERYTHING... rests on one ephemeral thing – the market's confidence in the power of Central Banks to ensure a good outcome no matter what. Anybody paying attention to the lesson should not just be thinking about what might happen when that fragile confidence evaporates, but taking steps to ensure they don't get caught out when it does. The problem comes in leaving such precautions a day too long... Ask anybody who was considering selling their Chinese equities last Friday but didn't...

When markets are rising, cognitive dissonance reigns supreme.

When Fear took over, the Central Bank was powerless to react.

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