Today's Market
by Dr Invest


I know I have some faithful readers who are waiting to hear some good news in the markets. And yes, there are some who are making some money right now, and they need to since they lost 20% to 30% in 2011. You have to remember that the market closed just about even in 2011 and with a CPI of 3% (inflation), the overall market would have been around negative 3%. When you consider that most finanical advisors miss the market by 15% to 20%, it is no wonder that 2011 shows some very strong losses in portfolios.

Today, there are a host of voices saying, "It just can't get any worse. We have hit the bottom. Buy while stocks are low. These are the same voices that lost 20% of your portfolio in 2011. They still haven't learned. ICI.ORG shows that more money has moved out of Mutual Funds than ever before. People, just like me, are sitting on cash. Wall Street is wondering why people are not thowing their money into stocks. Don't listen to their chiding. Smart money (institutional investors) hasn't started investing into stocks yet, you would be wise to stay out of the market at this time.

WARNINGS ON THE ECONOMY

Wednesday, the World Bank warned of a possible slump in global economic growth and urged developing countries to prepare for shocks that could be more severe than the 2008 crisis.  Buying stocks right now is akin to swiming with the Alligators. I think for now I will stay out. Here is a bit more of the World Bank's analysis:

Global growth could be hurt by a recession in Europe and a slowdown in India, Brazil and other developing countries, the Washington-based bank said. It said conditions might worsen if more European countries are unable to raise money in financial markets. "The global economy is entering into a new phase of uncertainty and danger," said the bank's chief economist, Justin Yifu Lin. "The risks of a global freezing up of capital markets as well as a global crisis similar to what happened in September 2008 are real."                  
Many governments are in a weaker position than they were to respond to the 2008 global crisis because their debts and budget deficits are bigger, Lin said at a news conference. In the event of a major crisis, "no country will be spared," Lin said. "The downturn is likely to be longer and deeper than the last one."  The bank's outlook in its "Global Economic Prospects" report issued twice a year adds to mounting gloom amid Europe's debt crisis and high U.S. unemployment.

Closing Thoughts

Although I want to give you "good news", there is little to give. Stay away from stocks right now and don't get suckered into investment vehicles that are most likely to decline.

(Note: the above article is for entertainment purposes only and not to be used as investment advice.)