Today's Market
by Dr Invest


So here we are, the market has just had a break-out and continues to move strongly upward... and with no end in sight. The DOW moved above 13,000 today, suggesting a strong advance.

What could be moving the market? GAMES, GAMES, GAMES is the answer. The Federal Reserve is playing a dangerous game in which we all are forced to participate. You can't add billions in liquidity to the market, which is equal to printing money, without seeing INFLATIONARY PRESSURE.

We are seeing the price of stocks advance on the increased liquidity imposed on the market by the FED. We are also seeing an increase in the price of commodities. Your gas is higher, your groceries are higher, in the months ahead the cost of saving the U.S. from financial collapse, wil be rising costs. Rising costs means RISING PROFITS. These profits come not from increased buying, but from increased costs. The consequent rise in stocks is only smoke and mirrors, IT IS A GAME!

More and more pressue is being put upon the investor to buy stocks to keep from loosing the value of his portfolio. The contradiction here is that you can't afford to stay out of the market and you can't afford to get into the market.

Dr John Hussman at Hussman Funds wrote this week, "There's one question you need to ask yourself before investing in the market right now: Do I feel lucky?" A break-out typically signals a bull market for the months ahead. So you have to ask yourself: Is this the start of something big over the next few months, or is it the end of a six month uptrend.

I can't answer that question, because we are all guessing. I can't tell you how much in real dollars, the federal reserve has inflated the market. I can't tell you when that inflation will begin to show its ugly head in the market. All I know, is that a some point you will have to hold-your-nose and jump in.

Methods with Promise

Fortunately, I have provided to you some ideas that follow the "Ivy Portfolio". This method centers around long-term investing with a twist of selling when a selected group of ETFs fall below the 214 day simple moving average (SMA).

This is likely the safest method to use at this time, but don't put all your investment money into one method. If you have been out of the market, make your move back into the market slowly. Remember the FIRST RULE of trading: Don't lose money!

Let's say you have $100,000, divide it by 3. You now have $33,333.33 for each of the three parts. Take half of $33,333.33 to make your first investment into an EFT. Those following the "Ivy Portfolio" would invest $16,666.65 into an ETF called, VTI.  VTI is an EFT index in US stocks. You would hold the remaining $16,666.65 for investing after you have seen some PROFITS in the original investment into VTI.

In theory, once the EFT called, VTI gains 5%, you invest the remaining $16,666.65 into VTI. If the market suddenly dropped, you would lose only a minimal amount before the stop-sell engaged. This is the best way to limit your risk.

With another third of your portfolio, amounting to $33,333.33. You invest $16,666.65 into BND, VNQ, VEU, and DBC. (VTI is the fifth ETF of the Basic Ivy Portfolio) Only use these EFTs. Don't buy EFTs if below the 214 day moving average.

DO NOT buy an EFT without also placing a STOP-SELL on the EFT. See my video in the sidebar to learn how this is done on OPTIONSHOUSE trading platform.

For all the details, select MODEL ETF PORTFOLIOS in the sidebar and go to the bottom to read the ProFolio Model. You will find instructions on how to setup your EFT chart and 214 day moving average. Please keep the same EFTs that the Ivy Portfolio has suggested for their portfolio.

If you have questions, you can leave reponse on this blog.

Being Patient

I am inclined to hold-off just a bit longer before returning to the market. It is all the reasons that I have previously mentioned that makes me timid to invest now. The market continues to climb without any real fundamental reasons for climbing other than "crowd mentality".  Furthermore, the stock market cannot continue to rocket forward indefinately.

I do see opportunity at the end of October, until January and February of 2013. So at this time, I keep reminding myself about the benefits of waiting.

Let me remind you, that since the fall of the market in 2008, the market has now grown 100%. Thats an average growth of 20% per year. It is a fall in the market that sets you up for great returns, just don't be in the market when the fall occurs.

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