“Dear Mr. Fuller, What about the weapons of mass destruction, the derivates, quote of Mr Warren Buffett? About 500 trillion $ now and interest related. What’s going to happen if rates rise? Could gold be the canary like in 2001 when it started its take off as a prelude to the bankruptcies of Bear, Lehman, Merrill Lynch? Insiders had hedged their bets. Merry Christmas and a Healthy 2015.”

David Fuller's view

Thank you for your greetings which I return in kind.

Re your questions, which I will address on a behavioural basis, this remains the most feared and unloved bull market that I have lived through as an adult. 

Even older investors may find that similar to the 1940s.  Yes, some of Wall Street’s cheerleaders were singing praises in August and September, but they have become more edgy since the shakeouts in October and December. 

Nevertheless, the uptrends are still intact for most leading stock markets.  Monetary policy remains generally positive; bond market yields are low, people fear deflation rather than inflation and the current price for crude oil is a big stimulus for most economies.  Seasonal factors remain favourable.  I certainly do not feel that I am complacent, not least as there are always plenty of things to worry about.  Nevertheless, I remain about 97% invested, in terms of my allocation for equities.  The only thing we know for certain about this bull market is that it will end, and rising interest rates will be an early signal. 

 Gold could be bottoming although the technical evidence is far from conclusive.  Its historic value investors have returned but in the West it still faces very tough competition from government bonds and stock markets.