Today's Market
by Dr Invest

Where will the market go? In front of a real market success are a series of hurdles. Will Greece evade its financial storm? Will Spain find relief for slip further into indebtedness? Will Italy find its financial footing? And how about our own looming financial cliff? Obama successfully navigated the political pitfalls, retaining his presidential position; but question now is will Obama show us the money, will he show us that he can turn the market around? I speculate that the ingenious ideas of taxing the rich and implementation of the rules and regulations surrounding Obama Care will continue to create negative economic outcomes.

Milton Friedman, Nobel prize winner in economics, talks about economic outcomes as government seeks to manipulate markets and tax to fund their agendas. I think some of the things said by Dr Friedman are so essential that I want to give you some links on www.youtube.com.

• Free Lunch Myth - https://www.youtube.com/watch?v=YmqoCHR14n8
• Robin Hood Myth - https://www.youtube.com/watch?v=5Wx5PYZIWcQ&feature=relmfu
• Myth of Social Security - https://www.youtube.com/watch?v=rCdgv7n9xCY&feature=relmfu
• Stimulus & Inflation - https://www.youtube.com/watch?v=6W_9I0nk8uI 

I encourage you to find every video you can on youtube with Milton Friedman and consider the principles in today's economy.   

A Look at My Investment Positions

All of my investment positions are slowly improving but we remain in a threatening market. Even should we make leap over the fiscal cliff, most economist believe that 2013 will slip into a recession. Go back and re-listen to Milton's Stimulus & Inflation on You Tube. We are drunk with stimulus and it take more and more stimulus to keep the economy high. Now that the market has considered that each month 40 billion will be used to stimulate the market, there is no further expectation of stimulus from the Federal Reserve. If the market sours, the stimulus will already be discounted. A market decline will be a market decline. Please note....a new bubble is being created in the housing market because the 40 billion monthly is being used to by mortgages. So what will happen when all this money being poured into the economy stops?

All I can do is hope that my positions continue to climb and that WMT (walmart) catches fire over the next two months. I am reluctant to move into stocks when I see people selling their stock positions. The fear is tax related... thank you Obama... so the very wealthy are selling their stocks to pay taxes at a lower capital gains rate before they rise to a higher rate after the end of the year.

This creates a kind of "perfect storm" in which there is a stock market bottleneck; everyone must sell their stocks by the end of the year. Even if this is only 25% that sell-off their stocks for a tax benefit before 2013, we are talking about billions of dollars exchanged. This will prove to be a very tricky situation. My recommendation is to prepare to make some gains, but also have STOP-SELLS on all your trades to protect yourself if there is a major market sell-off.

 Our gold position (IAU) was as low at 5.53% two weeks ago. It has regained some momentum. The gold position is a LONG-TERM position of 9 months to 12 months. I hope for a 20% gain or more. If the market turns sour in 2013, IAU could prove to be a valuable position.

WMT will report earnings this week. I think they will meet their earnings and WMT will be a hot stock to be holding. I hope for 6% or more from WMT before the end of the year.

BND has not performed well because of competition with the FED. Twist continues and diminishes the returns on bonds.

TIP has performed well but not as well as I had expected. I am hoping for a 6% return by the end of 2012, but even the Treasury Inflation Protected product is being influenced by government manipulation.

So I am prepared for the market to continue a solid uptrend over the next five years, but I am also prepared to sell everything immediately. This is a sad day in American economics when you can't depend on the market to act in predictable ways, instead; we are seeing volatile rises and falls, the gain of billions and the loss of billions. This odd contradiction remains in the market and will not resolve itself until politicians in the U.S. are committed to a "balanced budget" and the reduction of national debt. Though these actions may be painful over the short-term, these actions would bring prosperity to our children in the years ahead.

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