Back on 26 June I wrote about the euphoric rally that is still to come that will be the cherry on the top of this global equity bull market, a bull market that has existed for virtually everyone except Australian ASX investors. Following the expected short-term weakness surrounding Greece and the realization that the Fed will raise rates in September, conditions are near perfect for an enormous rally – particularly in some key sectors – over the course of the next six to nine months.

Recently I discussed one of the important markets that will be important in highlighting when serious downside risks will emerge for global equity market – namely, the high yield corporate debt market. Otherwise known as “junk” and can be monitored by the US-listed High Yield Corporate Bond ETF (HYG.ARC).

The title may be controversial but it’s time to sack the Reserve Bank board and replace it with the members of Federal Reserve. I said it, I mean it and I need to get it off my chest. 2015 has been a complete circus performance by the RBA – a comical event that has global investors laughing at Australia as they continue to pull their money out and invest it in places with real growth and opportunity.

Whenever, I am asked by someone looking to start investing in the stock market and what should they buy I very rarely give them an actual investment. The basis for this is that everybody’s risk tolerance and investment horizon are different and simply giving them a trade idea is of no benefit. In fact it only puts my reputation at risk because inevitably even if the stock does appreciate I am unlikely to be around to tell them when to sell. I would giving them only half the trade.

Last week we discussed the complacency financial markets have been taking with respect to a first Federal Reserve interest rate increase and as a result markets were vulnerable to surprises both for the bond market and equity markets.

Markets are absolutely focused on when the Federal Reserve will hike rates. And it seems most are expecting that this will be the start of a market correction. The reality is the exact opposite is likely to happen with the first rate hike likely to be a take off point for equity markets on a case of “sell the rumor and buy the fact”.

As we noted last week, the ASX 2000 has experienced severe underperformance to the US not only in the past two years, but since the GFC lows in March 2009. Fresh record highs across virtually all sectors in the US has made the last 5 years one of the most lucrative in history. Unfortunately one that the local market has not participated in.

Whenever, I have asked many of my successful trading peers – hedge fund managers, proprietary traders and wealth managers – what is the most common mistake traders make the most common response I receive is they are unaware of type of market environment they are trading in.