Dealing with market paradoxes

(From June 1, 2015)

There are few contradicting factors that tell the story about trading and investing in this market. A multi-year bull market is adored, of course, given recent success, but also feared since it has had a good run. Thus, recognizing these points is vital:

• The more the Fed talks about the “strong” possibilities of rate hikes, the more confirmation of economic slowdown.

• The more interest rates remain low, the more folks feel justified taking additional risks by chasing yield.

• The more the volatility index declines, the more unforeseen risk ahead due to complacency.

This is a mind game, after all, where the trickery is plenty and truth discovery requires sharpness and some luck as well.