Investors Business Daily has had a nice track record during the 2008 downturn and the 2009 rally. Investors who followed their Big Picture outlook sat out most of the 2008 losses and jumped into the rally shortly after it began. They remained bullish throughout most of 2009 and only turned cautious (but not bearish) later in the year.
As of Friday, IBD has officially changed their market outlook to “Market in Correction”. Friday marked the 5th major distribution day in the last month and volume has been substantial during the recent downturn. The market has also moved through the 50 day moving average. On a more micro basis IBD is growing increasingly concerned about specific leadership action. Many of the best performing names have begun to underperform on a relative basis. All of this adds up to a “market in correction” – IBD’s most cautious investment outlook.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.