Today's Market
by Dr Invest
I really have nothing to write about today, but it is good to take notice of the headlines in the economic news today. Here's one: "Don't Fear the Sell-Off". Then there is: "Stocks Rebound After April Slide". The media machine is actively repainting the last five-day decline as an "insignificant bump-in-the-road" even though half of what has been gained this year has now been lost, it is simply a "market correction".
It is the burden of our NATIONAL DEBT that has overturned our economy. Regardless of the "crowd mentality", the fundamentals in our market is still weak. I want to keep today's report short, but go and read the Hussman Funds Report at http://hussmanfunds.com/wmc/wmc120409.htm
Rather than going into all the details of this report in my blog, you can read for yourself the varied indicators that point to the weakening market. Though some of my stocks sold at the sudden and rapid decline of the market over the past five days, I will NOT be getting back into the market anytime soon. The risk is too high and the return too small.
Expectations for Growth
In a number of market sectors, analysts have projected "double digit growth", where as the GNP is projected to grow at 3% in the best case scenario. This creates a dilemma of sorts, how can stocks grow 10% or more when the economy is growing at 3% or less? Help me here! Educate me! We can't "Quantitivly Ease" our way to prosperity. Any money poured into QE by Bernake is "your tax money at work". You are going to pay for the "feel good" sense that our economy is rebounding. A hot chocolate as the Titantic sinks is welcomed, but what you really need is a lifeboat. We have been fooled into thinking that everything has returned to NORMAL, when we will be faced with a higher cost of living and higher taxes in the months ahead... all sure to put a drag on the economy and our futures.
There are expectations for growth found with investors. Until 2008, my entire portfolio was invested with American Century. I was heavily invested in stocks both in the U.S. and Internationally. My total average return for my portfolio was 14%. I had the sense to get out of the market before the collapse in 2008, but these kind of double digit returns just aren't possible today.
Still, I think that a double digit is the normal; today, there is a "new normal" that falls far below the expectations of the average investor. To return to the "old normal" of double digit returns would put your portfolio into a high risk situation. Financial advisers are now suggesting that you can only remove 4% of your portfolio a year without affecting your core investment, when five years ago, the suggestion was 8% could be taken each year without affecting your portfolio. There is a NEW NORMAL because our potential for growth has been arrested by the BURDEN OF DEBT carried by this nation.
What Can I Do?
Don't believe everything you read or hear about the economy. You will know that the economy is improving when you see the economic cycle return to a season of profit. Six months or a year of economic growth will tell you that the economic cycle has changed. Listen, a true BULL MARKET will last around 10 years. Even if you miss the first year, you still have nine more years to make money.
Pay attention to the ANNUAL MARKET CYCLES. Most money is made between the end of October until January. Most often, the least amount of money is made between May until October. These are not stock recommendations, but if you did well in CATM from October to April, unless there are major changes in the fundamentals CATM, you can re-purchase CATM in October and enjoy another season or several seasons of growth in the CATM stock. As in all investments, you have to pay attention to what you are doing and to the stock you are buying. But a consistent trading plan will maximize your return and get you out of the market when there is the greatest opportunity for losses. (See STOP-SELL)
Conclusion
Listen the economy is NOT HEALTHY. SONY is in trouble. There is talk of BEST BUY biting the dust. YAHOO is laying-off 2000 employees. Spain and Italy are struggling to keep from slipping into bankruptcy. Geopolitical challenges with North Korea, Iran, and Syria make their own contributions to market fluctuations.
For now, the potential for success has become marginal. STAY OUT OF THE STOCK MARKET. Be patient and wait for the best opportunity for success. That opportunity will come and you will make all you need with little risks to your investment.
by Dr Invest
I really have nothing to write about today, but it is good to take notice of the headlines in the economic news today. Here's one: "Don't Fear the Sell-Off". Then there is: "Stocks Rebound After April Slide". The media machine is actively repainting the last five-day decline as an "insignificant bump-in-the-road" even though half of what has been gained this year has now been lost, it is simply a "market correction".
It is the burden of our NATIONAL DEBT that has overturned our economy. Regardless of the "crowd mentality", the fundamentals in our market is still weak. I want to keep today's report short, but go and read the Hussman Funds Report at http://hussmanfunds.com/wmc/wmc120409.htm
Rather than going into all the details of this report in my blog, you can read for yourself the varied indicators that point to the weakening market. Though some of my stocks sold at the sudden and rapid decline of the market over the past five days, I will NOT be getting back into the market anytime soon. The risk is too high and the return too small.
Expectations for Growth
In a number of market sectors, analysts have projected "double digit growth", where as the GNP is projected to grow at 3% in the best case scenario. This creates a dilemma of sorts, how can stocks grow 10% or more when the economy is growing at 3% or less? Help me here! Educate me! We can't "Quantitivly Ease" our way to prosperity. Any money poured into QE by Bernake is "your tax money at work". You are going to pay for the "feel good" sense that our economy is rebounding. A hot chocolate as the Titantic sinks is welcomed, but what you really need is a lifeboat. We have been fooled into thinking that everything has returned to NORMAL, when we will be faced with a higher cost of living and higher taxes in the months ahead... all sure to put a drag on the economy and our futures.
About Your Portfolio
There are expectations for growth found with investors. Until 2008, my entire portfolio was invested with American Century. I was heavily invested in stocks both in the U.S. and Internationally. My total average return for my portfolio was 14%. I had the sense to get out of the market before the collapse in 2008, but these kind of double digit returns just aren't possible today.
Still, I think that a double digit is the normal; today, there is a "new normal" that falls far below the expectations of the average investor. To return to the "old normal" of double digit returns would put your portfolio into a high risk situation. Financial advisers are now suggesting that you can only remove 4% of your portfolio a year without affecting your core investment, when five years ago, the suggestion was 8% could be taken each year without affecting your portfolio. There is a NEW NORMAL because our potential for growth has been arrested by the BURDEN OF DEBT carried by this nation.
What Can I Do?
Don't believe everything you read or hear about the economy. You will know that the economy is improving when you see the economic cycle return to a season of profit. Six months or a year of economic growth will tell you that the economic cycle has changed. Listen, a true BULL MARKET will last around 10 years. Even if you miss the first year, you still have nine more years to make money.
Pay attention to the ANNUAL MARKET CYCLES. Most money is made between the end of October until January. Most often, the least amount of money is made between May until October. These are not stock recommendations, but if you did well in CATM from October to April, unless there are major changes in the fundamentals CATM, you can re-purchase CATM in October and enjoy another season or several seasons of growth in the CATM stock. As in all investments, you have to pay attention to what you are doing and to the stock you are buying. But a consistent trading plan will maximize your return and get you out of the market when there is the greatest opportunity for losses. (See STOP-SELL)
Conclusion
Listen the economy is NOT HEALTHY. SONY is in trouble. There is talk of BEST BUY biting the dust. YAHOO is laying-off 2000 employees. Spain and Italy are struggling to keep from slipping into bankruptcy. Geopolitical challenges with North Korea, Iran, and Syria make their own contributions to market fluctuations.
For now, the potential for success has become marginal. STAY OUT OF THE STOCK MARKET. Be patient and wait for the best opportunity for success. That opportunity will come and you will make all you need with little risks to your investment.
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