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From Teeka Tiwari, editor, Mega Trends Investing: Every major secular bull market since the Great Depression began with a shift in one ratio…
And 2015 marks the first time it’s shifted “positive” in 33 years.
I call it the Golden Ratio. It occurs when the number of middle-aged Americans (35- to 49-year-olds) grows larger than that of young Americans (20- to 34-year-olds).
The ratio works because these middle-aged folks are in their peak earning—and spending—years. It sends trillions of dollars coursing through the economy… as these folks buy cars, houses, vacations, and college educations for their kids.
Today’s middle-aged cohort is 50% bigger than the baby boomers, who spurred the last major Golden Ratio period. That period began in 1982. The wealth created in the stock market during that time was incredible.
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Now you might be asking yourself, “If 2015 is the beginning of the Golden Ratio, why has the market done nothing this year?”
If you look back to the S&P 500 in 1982, you’ll see it had a similar “garbage” year.
You can see the high was 122 to start the year. Then the market dropped to 102. That’s a 17% drop… before the back half of the year when equity started to take off.
If I told you in 1981—when the S&P 500 was at 138—that 1982 would mark the beginning of the biggest bull-market period in history… and you saw equities drop to 102 in 1982… you’d say, “This guy is blasted crazy. He doesn’t know what he’s talking about.”
But 1982 signaled a brand-new secular bull market where the Dow Jones averaged 15%-plus compound annual gains.
The 1982 Golden Ratio triggered the largest bull run in history…
My point is this: History is repeating itself.
Look at the big picture. The stock market can do whatever it wants to do on a day-to-day basis. We have no control over that. But markets move in trends… massive trends.
And we’re at the beginning of a 14-year bull-market trend.
If you can keep your trading in alignment with it, you’ll make an enormous amount of money.