What if This Stock Market Boom Lasts Longer Than Anyone Expects?

Almost every day, you’ll read somewhere that one market or another is booming or is about to boom.

In yesterday’s Money Morning, we wrote about an impending energy boom. Plus, we’re big advocates for booms in as diverse areas as technology and emerging markets.

But when you stop and think about it, in your lifetime there will only be a few genuine, potentially life-changing booms.

This will be one of them…

Think about it. Someone born in 1960 may have made their first stock market investment at the age of 20 in 1980.

If so, they would have ‘enjoyed’ the 1980s inflationary stock market boom. Following the 1987 crash, they would have enjoyed the 1990s dot-com boom.

After that market crashed in 2000, they next would have had the 2003–2007 resources boom. After the 2008 crash, they should have made money from the boom that has lasted through to today.

That sounds like a lot of booms. But over 34 years you’re only looking at four distinct booms. And by now, the investor who was 20 in 1980 is now 54.

The point we’re making is that if you think you can sit on the sidelines of a booming market, you’re wrong.

You don’t know when the next boom will appear. And you don’t know how long the boom will last. That’s why it’s important to grab each opportunity while you can.

Don’t sit this one out

Think of it this way. The first resources boom only lasted four years, from 2003 to 2007.

Four years isn’t long to sit on the sidelines. But compare that to the current boom. It started in 2008. It’s now 2014. It has already lasted six years.

Investors who in 2008 and 2009 decided to sit this one out because they feared a complete economic collapse now have a tough choice.

The investor who was 20 in 1980 was 48 in 2008. They had 17 years until they would be ready to retire. That’s plenty of time…especially if the global economy imploded quickly.

Today that same investor is 54. Now they only have 11 years until retirement. That’s OK. It’s enough time. But this is where they could find themselves in a bind.

The current boom is already six years old. If they decide to sit out the rest of this boom, how much longer will they have to wait for the crash and the following boom? Two years. Three years. Five years.

What’s to say this boom can’t last another 10 years?

If it does, today’s 54 year-old investor only has a year in which to grow their wealth so they can still retire at 65.

This is why it’s important to grab opportunities as they appear.

As you should know by now, we don’t cheerlead for the stock market. We’re not one of those mainstream goons who say you should put every last cent into stocks.

We recommend a different approach. We say that investors should only have 50–60% of their wealth in stocks. The rest should be a combination of cash and precious metals (gold and silver).

Importantly, because you have less money invested in stocks, it means you have to take advantage of the big booming trends when they come along.

A freak storm in stocks

One of the biggest, if not the biggest booming trends right now is China.

If China’s economy grows at the current rate it will double in size within 10 years. Even if China’s economy grows at half the current rate it will double within 20 years.

That’s an extraordinary investment opportunity. It would be foolish for investors to miss out. That’s exactly why we hired a dedicated emerging markets analyst to focus specifically on this market.

Read the rest of this article at Money Morning