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If I could have a dollar for every time someone tells me the markets are about to turn, I'd be a rich man. And this is just in the past two weeks, let alone the past 6 months!

On Monday morning it was looking like it would be another week of triumphs for not only the ASX 200, but also for the Dow, Asian and European Markets.

Once again, US earnings season kicked off with a bang, although not without a few hiccups along the way.

The markets have so far been running on better than expected results from General Electric, Bank of America, Caterpillar, and Apple Computers (which reached monumental heights, making a historical high of $193).

Translate this to Australia, and we would usually see a domino effect. Other factors, being a raft of economic data and further fears on the state of the world economy, kept the bourse down.

Oil has reached levels not seen since October 2008, which makes energy producers extremely happy, and gold continues to threaten new records, supported by a languishing US dollar. So where does that leave us? The potential is undoubtedly there to see this bull run higher, and in the long term, it will. But will we see the pull-back so many have been anticipating?

While I hear all this speculation, I continue to buy. Why wouldn't I? It's all about "time in" the market, not "timing" the market. Of course, the DividendKey stock selection strategy helps me target 'alpha' (outperformance) with a margin equity approach, rather than just achieve average results!

If you're a trader, you will likely take a more cautious approach. A pull-back is long overdue and it will arrive. It's a matter of when, regardless of the reported catalyst. Profit taking caused the markets to stall in the second half of the week, particularly in the banks, where gains over the past 6 months have been stratospheric.

I've seen this many times since the March low. Every time, those with a fear of letting profits run, end up getting back a little late, or missing the next run of gains completely. Don't get me wrong, taking profits is great and at times, very sensible. As an investor, what will make the difference to your portfolio are consistent contributions and smart portfolio management - an important chapter in the DividendKey and one that everyone should study carefully.

As an investor, my heart goes out to all those who believe the gospel of "holding off" because the pullback is coming. Just be aware that so is Christmas! Buy good stocks, make regular contributions and these times will be a small dent in the armour of an extremely prosperous long-term portfolio.

The ASX 200 is up 55% from its lows and still has a long way to go. Many of us are constantly adding to our portfolios and building a very healthy little nest egg. Those of you who aren't, it's never too late, but it is time to get smart.

Make the markets work for you!

Andrew Page
Trading Tutors Team

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