Having lived aboard a sailboat for 2 years I was stricken when I saw the movie "PERFECT STORM". I know these are things you want to avoid at all costs. Even little storms can play havoc with your life style on a boat.
From a world view it looks like we are headed into a perfect storm of world macroeconomics. That means every one in the world is going to be impacted economically by the developing global economics. The more economically developed the country the worse they will be affected. Those third-world countries just working their way to becoming second-world countries can easily be set back 30 to 50 years.
What am I talking about?
People need food and shelter and after they have the basic necessities they will buy nonessentials such as entertainment and toys (boats, cars, jewelry, bigger houses, second homes, etc.). These are all purchased because the person has extra units of credit called money with which to buy the extras. In order the get that extra money he has to have a steady job. World wide there is excess productive capacity. Approximately 25% of productive machinery is idle; we are working at about 75% of capacity where the normal rate of production is between 87% and 92%. That means that many who were at those machines are now sitting at home wondering not about a new toy to buy, but how to make the next mortgage payment.
Everything looks smooth. The waters are calm and the breeze is at our back. When that perfect storm was forming in the Atlantic Ocean there did not seem to be any danger, but the meteorologists watching their satellites and computers could see that all was not well and a terrible storm was forming. They realized when it hit that ships would be at high risk.
There are meteorologists of the stock market. They are a combination of technical and fundamental analysts and it is their job to predict the stock market weather. Like weathermen the job of prediction is not easy nor is it an exact science, Many get it wrong, Today the news of the stock market and the economy is dominated by the fundamentalists who see excellent weather and tranquil seas. Many technicians see it otherwise. They are predicting that there are formations that could produce a perfect storm that will wipe out many portfolios.
Historically the timing of fundamentalist (those who follow the reports of company profits and government statistics) usually lags while the prediction of technical analysts (those who follow chart patterns and historical data) has been much more accurate.
The key to the stock market is timing. The investor wants to own stocks and mutual funds while the market is advancing and to be in cash while the market is declining.
Today the fundamentalist weathermen say buy while many technician weathermen are recommending cash. In the next few months we will see if the weather is calm or stormy.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
house refresh service Lincolnshire ..I read a comment by a forum member on another... Read More
What a great statement!I just heard someone use it in... Read More
If you are going to be a winner in the... Read More
Now that you have some money burning a hole in... Read More
One of the great "secrets" of successful people is discipline... Read More
It takes a total mental commitment to the task. It... Read More
Options trading can increase the profits you make when trading... Read More
When you become interested in a stock or mutual fund... Read More
With over 6,000 mutual funds available, it may be tempting... Read More
Question: How does it get better when it gets worse?Last... Read More
If you have a pension plan at work you will... Read More
This is an extract of an article which was first... Read More
(1) CHK stock price $16.74, NAV $32.5CHK is my favorite... Read More
Right now there doesn't seem to be any "gold fever".... Read More
The basis of diminishing return discussions surround such simple notions;... Read More
Four blind men were asked to give a description of... Read More
It has often been said that there is only two... Read More
With an insecure job market, overworked employees, insufficient retirement savings... Read More
Everyone who invests in the stock market wants to be... Read More
Maximizing a stock market investmentThere are several factors an investor... Read More
When you stand on the ocean shore and watch the... Read More
Just about everything you have been told about Social Security... Read More
Regardless of the fact that the world's stock markets have... Read More
TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This... Read More
The bear market that showed up at the end of... Read More
licensed cleaning services Lake Forest ..It has often been said that there is only two... Read More
I cringe every time I hear a novice investor tell... Read More
When we go to the circus we see a trapeze... Read More
Every publicly traded company is required by the SEC(Securities and... Read More
04/28/2005NASDAQ dropped -12.5% year to date in 2005. S&P500 index... Read More
Mutual funds by definition are a mixed bag of stocks,... Read More
Did you know you can make money (and a lot... Read More
In 1960 an engineer working for a watch company in... Read More
Among the largest forces that affect stock prices are inflation,... Read More
One of the great truisms of Wall Street is "Don't... Read More
In a previously written article, we expanded the use of... Read More
You've decided to try your luck at trading stocks or... Read More
From the book 'The Stockopoly Plan' by the author Charles... Read More
We all know that emotions control every decision that an... Read More
Money management starts with protecting your capital, realizing profits and... Read More
Two weeks ago I wrote about what the Securities and... Read More
You remember (they show it on TV every year) the... Read More
During the day I watch CNBC-TV, the stock market channel.... Read More
There can't be many traders who haven't at least considered... Read More
Even if you don't own any of their stock or... Read More
Caught in a whirlpool and being sucked under. No life... Read More
Sometime around 1980, can't remember exactly, there was a flight... Read More
Disclaimer: Please note that I do not necessarily purchase, own,... Read More
For weeks, no, months we have been bombarded with nothing... Read More
There has been great condemnation recently because China has been... Read More
Stocks & Mutual Fund |