Big Warning for Stock Investors
The stock market has risen about 15% in the last 3 months and about 80% in the last 8 months. Seriously?
We are still losing close to 200,000 jobs a month and small businesses are hurting. The economic data is very mixed. The ONLY reason why the last quarter looked so good was because of the "Cash for Clunkers" program and the housing credits people received (which I think you can still get).
But people are saving more and are still very skiddish with spending.
There is NO reason for these stocks to keep climbing.
Look for a major correction soon. Stocks are climbing when the economic data doesn't back it up. We should be over 10% unemployment until 2011 (some are estimating) so there won't be any crazy retail spending in 2010.
I bet this holiday season will be depressing for retailers and look for the stock market to react in early 2010.
It seems wall street hasn't learned anything and it will be the small investors that will suffer again.You're right in a way, but you have to remember the entire market isn't controlled by unemployment, cash for clunkers or the holiday season.
There are a LOT of companies that are making BIG profits off the new helthcare package mr. Obama is spending 1.3 trillion of our tax paying dollars on. And where will the bulk of that money go?
There are a lot of medical/healthcare companies in the stock market, and a lot of people investing in them knowing that big bucks are coming their way with the package (that was just approved yesterday).
This will balloon the market up, but as far as putting that money back into the economy, probably not.
The cash for clunkers (although many participated), did absolutely NOTHING for our economy.
All it was for was to give the impression something was being done to ease the worries of the people.
Millions of dollars for a program we can't afford right now, and now we have to find something to do with all of the cars (clunkers) people traded in for the cash.
Hello debris and refuse...more garbage that will have to be stripped, chopped down and disposed of.
But I am betting, even though the unemployment rate is up, you will be surprised this holiday season.
Spending will be high, and a lot of those unemployed are getting extensions, up to 20 weeks in some areas.
This year will close with a bang, and the up season will create confidence in the market and you will see a strong start next year...IMO
TimTurner wrote:
The stock market has risen about 15% in the last 3 months and about 80% in the last 8 months. Seriously?
We are still losing close to 200,000 jobs a month and small businesses are hurting. The economic data is very mixed. The ONLY reason why the last quarter looked so good was because of the "Cash for Clunkers" program and the housing credits people received (which I think you can still get).
But people are saving more and are still very skiddish with spending.
There is NO reason for these stocks to keep climbing.
Look for a major correction soon. Stocks are climbing when the economic data doesn't back it up. We should be over 10% unemployment until 2011 (some are estimating) so there won't be any crazy retail spending in 2010.
I bet this holiday season will be depressing for retailers and look for the stock market to react in early 2010.
It seems wall street hasn't learned anything and it will be the small investors that will suffer again.That may well be case, but gives us little in the way of knowing what to do. When the bulls get going, they can become unstoppable, that is their nature.
However, there are islands of opportunity which require flexibilty and agility to take advantage of.
For myself, I look for those short term opportunities, get in and get out. I am not concerned with the direction, we all know that this mini boom is all about government spending.
Wishing you success in your strategy.
TimTurner wrote:
The stock market has risen about 15% in the last 3 months and about 80% in the last 8 months. Seriously?
We are still losing close to 200,000 jobs a month and small businesses are hurting. The economic data is very mixed. The ONLY reason why the last quarter looked so good was because of the "Cash for Clunkers" program and the housing credits people received (which I think you can still get).
But people are saving more and are still very skiddish with spending.
There is NO reason for these stocks to keep climbing.
Look for a major correction soon. Stocks are climbing when the economic data doesn't back it up. We should be over 10% unemployment until 2011 (some are estimating) so there won't be any crazy retail spending in 2010.
I bet this holiday season will be depressing for retailers and look for the stock market to react in early 2010.
It seems wall street hasn't learned anything and it will be the small investors that will suffer again.Keep on your toes and be ready to sell any time...
Perhaps you should look for other investment vehicles that are not based upon the ups/downs of U.S. Consumer spending, or even the U.S. government. There are plenty of opportunities out there to invest in. I for one, have been loving the metals, specifically gold bullion and the EUR/USD. Trading stuff like these can still give you great results regardless of what our crappy economy looks like.
Good Luck!
84- A.J. Frank
- 1 posts
- Joined: 2 months ago
- Hubs: 16
- Followers: 9
I see a wealth of great information and advice given as a result of your article. I believe that the Christmas season will be so-so, and we'll see a few more bankruptcies of well known corporations along the way.
I look for an end of year downward correction after the initial numbers come out, but nothing major.
IMHO, one of the best opportunities will be to get some of your stock profits off the table and into bonds a month or two before it is obvious that the Fed will raise interest rates. This will be sometime next year.Rising interest rates will cause the value of those bonds to go down, and you will lose huge amounts of capital. I would not invest in bonds in an environment of rising rates.
the companies that are listed do not solely make money in the US but have worldwide operations. Hence, even when the reality in the US is economic gloom and doom, these firms are still laughing all the way as the rest of the world, primarily asia recovers.
akihan wrote:
the companies that are listed do not solely make money in the US but have worldwide operations. Hence, even when the reality in the US is economic gloom and doom, these firms are still laughing all the way as the rest of the world, primarily asia recovers.
Very true. Asia seems to be recovering if you believe the stats. Either way, you need to be able to profit whether stocks are going up or down. Don't try to reason with the market, just go with it.
Kidgas wrote:
akihan wrote:
the companies that are listed do not solely make money in the US but have worldwide operations. Hence, even when the reality in the US is economic gloom and doom, these firms are still laughing all the way as the rest of the world, primarily asia recovers.
Very true. Asia seems to be recovering if you believe the stats. Either way, you need to be able to profit whether stocks are going up or down. Don't try to reason with the market, just go with it.
personally i think china has some really dubious stats. provincial officials are hard pressed to fake some numbers as their promotions depend on it. so incredulously, everyone has growth rates higher than the national average. but you can't deny they are an up and rising power. can't simply discount the brain and brawn power of a billion people.
There is a ton of risk in the market right now.
Berkshire Hathaway is investing in food and energy. It's not like Warren Buffet hasn't caught on.
Watch what he does and gauge your own portfolio risk accordingly.
The stock market condition is a reflection of interest rates and the money supply.
Until the Federal Reserve is abolished and the ridiculous inflationary debt practices are eliminated there will be plenty of artificial risk to make the chances of earning pretty dismal.
There is not going to be a rosy recovery because the debt model has collapsed. You can not pay debt with debt. This is why smart investors are getting into gold and tangible goods.
