Via The Market Oracle;
The following makes sense to me (with the key words, as always "nobody knows")
Point Three with the caution "use stops" seems rational in a world where "nobody knows."
In my opinion with savers getting next to zero returns from bank deposits then the market is the only other option unless one speculates in housing.
Also time frame matters, if you have years ahead in your life then mutual funds are, historically, guaranteed to bring a return above inflation and over time a healthy return.
For those with shorter time frame needs, i.e. income supplement being either at or near retirement or with a family to support and can follow the "stops" advice then yes, it makes sense. None of the below are my recommendations and any action on your part in respect of them are your own decisions.
"market outlook based on 3 different time frames:
One; Long term investors should be highly defensive right now. This speculative bull market may last another 6 months or even 9 months, but in 2 years time, long term investors will be glad they did not buy today.
Two: Medium term traders should go neither long nor short. Wait. Risk: reward doesn’t favor long positions right now, while shorting into a speculative rally can end in disaster.
Three: Short term trend followers should continue to ride the bull trend because no one knows exactly when it will end. In a highly speculative environment like today, the most profitable traders are short term trend followers who trade markets with strong animal spirits. Short term trend followers must use stops."