Today's Market
by Dr Invest

Do you remember what I said in my WEEKEND REPORT? Today, the market lost 1/4 of its gains from Friday. Over the weekend, a financial raido adviser lamented: "How foolish, all you who got out of the market, you just lost the gains of the market rising 200 points. Listen, the joke was on him. Preying upon the fear of investors, his only desire was to make profit by selling mutual funds. His perspective was entirely wrong. This is not the ordinary market, nor will it be the ordinary market until the debt is worked out of the market.

We are in for a long-haul of troubling financial markets. It is not, just "dollar cost average" and "buy and hold". This market has already killed a number of portfolios with that method.  The method, by the way, does work but just not at this time. We have a lost decade of investing and are well on our way toward another lost decade of investment short-fall.
GOLD

Gold hasn't really shown promise over the past year. And it appears that gold is only weeks away from either a downturn or an upturn. See the following articles on investment in GOLD. http://www.themarkettrendforecast.com/forecasts/gold-still-at-risk-of-a-large-downward-move-before-the-rally/

http://www.themarkettrendforecast.com/forecasts/

What is clear is that until GOLD breaks-out or breaks-downward, it is really a very poor investment. If you are presently holding gold investments, I would not sell until I saw a new trend set. You have already lost money holding gold in 2012, but gold could trend upward as well as trend downward at this time. When the trend is established, you will know if it is time to sell your gold or to buy more. If you are not holding gold at this time, don't buy it.

STOCKS

Stay away! If you presently own stocks, place a stop-sell on your stocks. If your stocks are performing, keep them!  But as always, sell the stocks that are losing value. Expect stocks to continue to decline until the end of October. We will revisit investment opportunities in stocks at the end of October.

DIVIDEND STOCKS
I suggest that you buy DVY, an ETF, when stocks begin to rise once again. While you could see dividends of 6% or more in dividend stocks, they can fall 15%, 30%, or more if stocks collapse. Eventhough you gain 6%, you could still have a significant loss. So don't buy DVY until stocks strengthen.

BONDS

Our investment into BONDS (TIP and BND) is performing well. As of today, the TIP and BND position with 1/3 of my portfolio had grown 1.91%. I am expecting a 6% to 8% return by the end of 2012.

REAL ESTATE

Reits have done remarkably well and are part of the IVY PORTFOLIO METHOD. I own some rental property, but with real estate each market is different. Our market is hot and the ROI is positive, eventhough tax aprasials have declined over the past few years. (ROI=return on investment)

So although real estate values are not growing, the cost of renting is growing, providing an investor with positive cash flow.

CONCLUSION

Hold on to your present BOND position in TIP and BND. I place a 3% stop-sell behind the closing price at the first of each month. I guess-i-mate that on the first of August, my bond position will have returned 2%. My potential loss will only be 1% if the stop-sell is triggered.  Though a big assumption, if my bond position had returned 3% by the beginning of August and if my 3% stop-loss was triggered, I would not have a loss.   What is better is when you have a 5 or 6% return, even if the stop-loss is triggered, you still gain 3 or 4%.

No one can predict the market, like a cork, you only float on top of where the market is headed. Unlike a cork, you can decide when you want to get out of the market.

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