Buy And Hold Investors, Beware

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Buy And Hold Investors, Beware

By David Spurr on October 20, 2009 | More Posts By David Spurr | Author's Website

When I look at a chart like the one above that was produced by Gluskin and Sheff, displaying the current debt to GDP ratio, it reaffirms my belief that we are in the midst of the largest worldwide credit bubble in the history of mankind. Never before has the US been so deeply in debt.

The equity market continues to drift higher each day and there’s seemingly no end in sight to the debt levels the USA is willing to create. This chart is the buy and hold investor’s worst enemy. It’s a friend in the short term - as it means that stimulus is pumping things up, but fundamentally, over the long term, it’s postponing “pain” in the economy.

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