Opportunity out of Despair

one thing that has remained consistent with my thesis about the reversal of the market is that it would occur close to the third quarter. if you review some of my post from earlier in the year you'll see that I looked at a contrarian theory about what I was looking at for my investment strategy. of note the most recent comments from the Federal reserve state that they are going to be more aggressive in focusing on a declining inflation rate. behind the headlines was something that was a clue they mentioned that they will do everything to stay aggressive what that means is that there could potentially be another 75% basis increase in the Fed rate. coupled with the demand destruction in crude and a doji candle on the chart for crude prices this would be a prequel to a sustained recovery from the third and a strong finish into the fourth quarter. of note CNBC and many of the other financial shows have been saying going long oil crew prices will go to 140 by years in we're under $100 now and I can see us going to 85 by Labor Day. if that happens that will ease a little bit of the inflationary risk that is kept many at their kitchen tables deciding between fuel or food. in a nutshell what I'm trying to say is that historically with such a pronounced decline in the market there has in most cases been an increase in the market weighted returns of indexes during the next 6 months. if I were a investor who hadn't started at this point I would look at grounding out my portfolio with the beaten down areas of the market such as the s&p 500 NASDAQ and biotech. I wouldn't look at specific names but I would look at the indexes that contain and focus on a strategy that uses dollar cost averaging to slowly build for the future. if you are looking at a 5-year or longer time horizon you're getting a huge discount on future growth right now the money's on the table go ahead and take it