It has been right to ignore this healthy unwind, however, and a resumption in the uptrend towards my target of 6922 has already begun. The FTSE 100 remains on track to achieve this target over the short term.
My updates have repeatedly criticised those investors who stubbornly refused to participate in this equity bull market, preferring instead to hoard their savings in cash. Not only has this inability to overcome a fear of equities cost them a great deal of capital growth, but the reward has been paltry – a near-zero interest return. Indeed the real return, allowing for some modest inflation, has been negative. They have missed one of the greatest wealth-accumulating passages of time we are ever likely to experience. Recent news that British corporate dividends hit a record total in the second quarter of 2013 (a massive cumulative pay-out of £25.3 billion) rubs further salt into these wounds, meaning the total return on equities has been even greater than the indices suggest.
Today's chart continues with a five-year view, highlighting my work since the unique low in March 2009. The narrow target band centred around 6922 remains as compelling as ever, whereupon a rise of 100% (excluding dividend) will have been completed.