Today's Market
by Dr Invest
A one percent gain is significant, but not unexpected. Just like the market can't continue going up indefinately, the market will not continue downward indefinately. At the end of April, Benanke's promise to stimulate the market if necessary, brought on an expectation of a QE3. What was a "head and shoulders" pattern, defining a downturn in the market, was broken by renewed speculation with a sharp downturn as predicted in the first part of May.
It is possible that the market will temporarily rebound between June and August, but I would expect a significant rise. Almost all the year's gains were erased by the last week in May as indicated by the red-line. Unlike previous years, the market has not continued an upward climb into June and July. I think what few climbs in the market we see, will be tepid at best. I would predict a flat to downward trend in the market, with a recessionary move in August and September.
A new QE3, twist, or new and innovative stimmulus by Bernake would halt temporarily this downward trend. I feel that there is a 70% change that some kind of stimmulus will take place, if for no other reason than to give both presidental candidates a fair opportunity to engage in political battle without the distraction of a failing economy. By the way, regardless of how you dress a pig, it is still a pig; no matter how you dress this economy, it is still a failing and stagnant economy.
A new stimmulus would give our current president bragging rights that the economy has revived under his wise direction and the Republican contender to raise doubts that the economy will remain viable. This is perfect stuff for good ole presidental election.
Yes, I am guessing that we will revisit the lows of August and September of 2011 once again around the same months of 2012.
The Bottom Line
I don't see many investment opportunities in this market. New bad news out of Europe will come, bringing painful losses. These losses will come without warning and could cut deeply. My view is that a cash position in your stock portfolio might be the wisest choice. A thirty-day uptrend might convince me otherwise; but if a dirty and ragged up and down in the market continues, I will want to remain in cash.
As represented in the seasonal chart above, I will be looking for the seasonal trend that begins at the end of October to re-enter a stock position.
For now, it is best to establish your bond portfolio. I have recommended TIP and BND exchange traded funds (ETFs). Go back to the blog on the first of May to learn how to enter the position.
My Bond Investment
As of this date, my mix of TIP and BND has gained .55%. As you know, using the IVY PORTFOLIO method, we don't really look at the performance until the 1st of June; and then we either sell the ETFs or buy more. As of this date, there is no reason not to buy more of TIP and BND. Unless TIP and BND fall tremendously, a stronger position will be purchased in TIP and BND. It is expected that TIP and BND will return 6% to 8% by the end of 2012.
We will be patient and disciplined in our buying and selling. Buying too early can mean loss, as well as selling to late. We will buy stocks when it is most favorable to see gains. Don't be concerned about what happens in between the now and the optimal time to purchase stocks. Even if there are 5% gains or 5% losses, these market moves are not important to being in the market at the optimal time. If you gain 5%, then loose 5%, you have profited nothing. If you buy at the optimal time and the market has energy to climb 12% to 20%, you have suddenly multiplied your portfolio significantly.
There is a season for everything under heaven; a time to sow and a time to reap, a time to gather stones and a time to cast away stones, a time to be born and a time to die. And so it is in the seasons of the market. A seed cast in winter will not produce fruit, but a seed cast in the spring, will multiply itself and bring bounty to the sower.
(Note: the above information is for entertainment purposes only and not to be used as investment advice.)
by Dr Invest
A one percent gain is significant, but not unexpected. Just like the market can't continue going up indefinately, the market will not continue downward indefinately. At the end of April, Benanke's promise to stimulate the market if necessary, brought on an expectation of a QE3. What was a "head and shoulders" pattern, defining a downturn in the market, was broken by renewed speculation with a sharp downturn as predicted in the first part of May.
It is possible that the market will temporarily rebound between June and August, but I would expect a significant rise. Almost all the year's gains were erased by the last week in May as indicated by the red-line. Unlike previous years, the market has not continued an upward climb into June and July. I think what few climbs in the market we see, will be tepid at best. I would predict a flat to downward trend in the market, with a recessionary move in August and September.
A new QE3, twist, or new and innovative stimmulus by Bernake would halt temporarily this downward trend. I feel that there is a 70% change that some kind of stimmulus will take place, if for no other reason than to give both presidental candidates a fair opportunity to engage in political battle without the distraction of a failing economy. By the way, regardless of how you dress a pig, it is still a pig; no matter how you dress this economy, it is still a failing and stagnant economy.
A new stimmulus would give our current president bragging rights that the economy has revived under his wise direction and the Republican contender to raise doubts that the economy will remain viable. This is perfect stuff for good ole presidental election.
Yes, I am guessing that we will revisit the lows of August and September of 2011 once again around the same months of 2012.
The Bottom Line
I don't see many investment opportunities in this market. New bad news out of Europe will come, bringing painful losses. These losses will come without warning and could cut deeply. My view is that a cash position in your stock portfolio might be the wisest choice. A thirty-day uptrend might convince me otherwise; but if a dirty and ragged up and down in the market continues, I will want to remain in cash.
As represented in the seasonal chart above, I will be looking for the seasonal trend that begins at the end of October to re-enter a stock position.
For now, it is best to establish your bond portfolio. I have recommended TIP and BND exchange traded funds (ETFs). Go back to the blog on the first of May to learn how to enter the position.
My Bond Investment
As of this date, my mix of TIP and BND has gained .55%. As you know, using the IVY PORTFOLIO method, we don't really look at the performance until the 1st of June; and then we either sell the ETFs or buy more. As of this date, there is no reason not to buy more of TIP and BND. Unless TIP and BND fall tremendously, a stronger position will be purchased in TIP and BND. It is expected that TIP and BND will return 6% to 8% by the end of 2012.
We will be patient and disciplined in our buying and selling. Buying too early can mean loss, as well as selling to late. We will buy stocks when it is most favorable to see gains. Don't be concerned about what happens in between the now and the optimal time to purchase stocks. Even if there are 5% gains or 5% losses, these market moves are not important to being in the market at the optimal time. If you gain 5%, then loose 5%, you have profited nothing. If you buy at the optimal time and the market has energy to climb 12% to 20%, you have suddenly multiplied your portfolio significantly.
There is a season for everything under heaven; a time to sow and a time to reap, a time to gather stones and a time to cast away stones, a time to be born and a time to die. And so it is in the seasons of the market. A seed cast in winter will not produce fruit, but a seed cast in the spring, will multiply itself and bring bounty to the sower.
(Note: the above information is for entertainment purposes only and not to be used as investment advice.)
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