Today's Market

The Suit is always right!

by Dr Invest

So here we sit, waiting. If you are in the stock market your gains for 2013 have been nothing short of incredible. What is even more remarkable is that this spectacular growth in stock prices has occurred while the growth in the U.S. economy has been at an all time low. None of this really makes practical sense and everybody is well aware that the government has "cooked the books" and the Federal Reserve is "manipulating the market". Like a train wreck certain to happen, we just can't look away; fully knowing that immediate returns from stocks are due to to government stimulus, we just can't stop investing in a market that is certain to collapse. 

This past week, bullish sentiment continued to be high. The expectation is that the stock market will climb unabated. Listen the S&P has already advanced over 21% in 2013. These kind of pressures are too great to miss, even if the risk is high. This is free money, offered by the tax payers via the Federal Reserve. Why shouldn't an investor take advantage of these kind of returns?

The problem is that no one can predict when the collapse will come, but when it does, it will be sudden and without warning. Yes, there is a group economists warning about this coming calamity but the party is just getting underway. When the fall comes, most investors will find their gains erased and their fortunes lost. 

In all the years I have invested, I have never seen such a year as this. And I have never seen such a cooking of the books by the Federal Government. Read the report below:

 The 162,000 jobs the economy added in July were a disappointment. The quality of the jobs was even worse. A disproportionate number of the added jobs were part-time or low-paying — or both. Part-time work accounted for more than 65 percent of the positions employers added in July. Low-paying retailers, restaurants and bars supplied more than half July's job gain.

"You're getting jobs added, but they might not be the best-quality job," says John Canally, an economist with LPL Financial in Boston. So far this year, low-paying industries have provided 61 percent of the nation's job growth, even though these industries represent just 39 percent of overall U.S. jobs, according to Labor Department numbers analyzed by Moody's Analytics. Mid-paying industries have contributed just 22 percent of this year's job gain.

This is once again, the "cooking" of figures by the government showing remarkable declines in unemployment, but a closer looks reveals poor job opportunities and even poorer income that reduces the consumer rally to fuel a strong economic growth.

As all ways, if you are invested, guard your profits with a stop-sell. If you are not invested, stocks are over valued, over bought, and could lose value. I am planning to stay out of stocks until there is a significant decline, likely after reductions in the government's quantitative easing.

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