Today's Market
by Dr Invest


The Market just isn't cooperating. After four days of market climb, we are yet once again slipping into the red. Yes, Spain and Italy have now been downgraded. Moody's also downgraded Portugal and a number of English banks. The dye is cast, the cement set. Hopeful traders now find themselves weighed down yet again by the Eurotribe. 

Some of the touted increases in employment were at best tepid and when one considered that half of those reported job increases were from striking ATT strikers returning to work. The only hope remaining is for seasonal hiring at Christmas and the wish for willing buyers to pump money into the economy.

What to do?

Here is what we are looking for: We need a consistent rise in the market. That means each day there are higher highs. Twenty days of higher highs is good; a month of higher highs is better; and best is three months of higher highs. The longer that the market is rising, the safer your investment will be.

So we are looking for a return to growth, something that I think is not likely. This doesn't mean that stores like "Family Dollar", "Dollar Tree", and "Dollar General" will not be a good investment and bring 5 to 8% to your portfolio from November to January. Other stocks worth watching are "Costco" and "natural gas stocks". Still, these should not be purchased without seeing some growth and most importantly, the growth for these stocks is seasonal and short-lived. ATT is a good dividend purchase at 6.05%, but in such a volatile market it seems that for the dividend gained, one could lose even more in the decline of the stock.

Danger, Danger!

One other consideration is the danger. Even if you purchase a good stock, the market can dramatically fall if there is a report of bad news. That news could come from Spain, Portugal, Greece, or Italy. Listen, this is no joke! If the market could climb this week 350 points at the last 45 minutes of the day, it could also fall that much in 45 minutes. So while the hope is that we will have a normal Christmas season, statistics seem to show that the market will remain tepid.

The Safest Place for Your Money

The safest place for you money at this time is in your BANK. The dollar is getting stronger and should continue to grow stronger when set against other currencies. A CD ladder can return a little over 1% per year, but that is better than a 5, 10, or 20% loss from risking your money for a shaky investment at this time.

Taking Comfort

You can take comfort in knowing that a strong fall in the market.. a recession... a depression, with the market falling 20 to 30% is not a bad thing if you are not in the market. Such strong falls in the market are followed by equally strong rises. So by being patient and waiting for the market to return to growth, you can see your investment increase tremendously. A recession can last around a year and a half, but within two years the market can return what was lost, plus more. That means that your patience to not return to the market until there is a marked return to growth could result in an average of 10% return per year.

(note: The above article is soley for entertainment purposes only and not to be used for any financial decisions.)