Today's Market
by Dr Invest

My dad was a great hunter and demanded that celebrate the hunt, just as he and his father had. Even though I haven't hunted in years, I learned some very practical things while on the hunt. After shooting an animal that ran into the bush, I was ready to immediately follow. My dad placed his had on my shoulder and said, "Son, wait!"  Whispering in my ear, he explained; "A wounded animal can make you his prey, give him time to die."

While watching the market, I have learned that the market refuses to decline peacefully. The economy has been declining for sometime, as documented by the ERCI at http://www.businesscycle.com/.  I BEG YOU, go and read this webpage. The economy has been in a recession for the past six months, even though the stock market has been climbing.

Some investors have blindly placed their money into the market with the promise by financial advisers that the market will continue its upward trend. There is are no fundamentals that support an advancing economy, excepting that among the world of ugly economies our is only a little less ugly.

For our economy to recover, people will need to: have a job, payoff their debt, have excess money to spend in stores and restaurants, and save money. The majority of Americans do not possess these things. Even if they have a job, it is not a job that pays what they once made and many people are working two jobs that they hate. (Only 65% of the population has jobs. Around 60% of Americans no longer have good credit. Most of the housing purchases are by investors who are looking for a place to invest their money that is safe, but over 60% of the people wanting to buy homes can't even qualify for those loans under the new Dodd-Frank bill.)

Where will the money come from to fuel the continued rise in stock prices? Please help me here. The economy is failing and the Bull Market is beginning to grey, beginning to show its age. The Bull is wounded, but not yet down. He may be able to regain his footing and push the DOW up to 15,000 before the end of the summer, but his demise is certain. The risk of investing at this time, will result in a significant loss of 30% to 40% in the immediate future.

No matter how much Bernanke and the Federal Reserve stimulate, it cannot change the fundamentals of the economy. Companies can't hire because there are no proven customers buying, there are no proven customers buying because companies are not seriously hiring. The government's answer is higher taxes and more regulations for corporations that increase their operating costs. And now, for the first time, the government is projecting that the national healthcare program will cost much more than originally projected. With 48% of all jobs being government jobs and 47% of all citizens in the U.S. getting some kind of entitlement, one has to ask, "Who will pay for all this?"

It appears that for years to come, we will continue on this course of economic stagnation. Still, investments could return significant gains, but only when the cycle has reached bottom. Presently, the business cycle is at the top, so now is not the time to buy equities.

Enough said! If you have stayed in stocks, put a stop-sell on your investments. If you are not invested in stocks at this time, don't buy stocks. Just as we saw this week, when the stock market turns down it turn down dramatically.

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