4. Strong economic or profit growth is good for stocks and vice versa.

This is generally true over the long term and at various points in the economic cycle, but at cyclical extremes it is invariably very wrong. The big problem is that share markets are forward-looking, so when economic data is really strong - measured by strong economic growth and low unemployment.

History indicates time and again that the best gains in stocks are usually made when the economic news is poor and economic recovery is just beginning or not even evident, as stocks rebound from being undervalued and unloved.

5. Budget deficits drive higher bond yields.

Its common sense that if the government is borrowing more  that is the higher budget deficits then this should push up interest rates (the cost of debt) and vice versa, but it often doesn't turn out this way.

Periods of rising budget deficits are usually associated with recession or weak economic growth and hence weak private-sector borrowing, falling inflation and falling interest rates so that bond yields actually fall, not rise.