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
Indian Head Park taxi to Midway .. Lockport Chicago limo O’HareWhat does it take to be a stock trader? It... Read More
When you stand on the ocean shore and watch the... Read More
"Buy and hold" is one of the most heralded investment... Read More
You must take the time once a month to review... Read More
Everything you invest in has risk so you want to... Read More
I was devastated!I just couldn't believe it. I was 10... Read More
If there is one term over-used when talking about making... Read More
Let's discuss commodities; with the latest Enron situation, it is... Read More
Today's society gives special recognition to alcoholics, sexaholics, binge-aholics, shopaholics,... Read More
Who are the successful investors?There are those who follow the... Read More
If you go to Haiti or other places in the... Read More
I have watched my cat play with a bag of... Read More
One Saturday morning, while he was sitting at his computer... Read More
I cringe every time I hear a novice investor tell... Read More
It looks like the market is ready to start up... Read More
You remember (they show it on TV every year) the... Read More
It seems that every day I turn on the TV... Read More
Are hedge funds a suitable investment for you? Hedge funds... Read More
Has your broker been calling you recently with the "great... Read More
On Monday, November 25, 2000 Investor's Business Daily listed on... Read More
Every day I see in the financial section of newspapers... Read More
One of the main reasons many of us get into... Read More
Stocks breakout from properly formed bases everyday but many investors... Read More
The greatest stock market myth is the idea that investing... Read More
I know there are a lot of you out there... Read More
Bonnie Chicago charter limousine ..Using Swing Trading Strategies and Technical Analysis when Trading Stocks... Read More
I don't know what kind it is, but I saw... Read More
Do you own any mutual funds? In an IRA or... Read More
The single most expensive stock market trades are those made... Read More
If you don't know where you are going any road... Read More
TOO OFTEN, INVESTORS SIMPLY CHOOSE TO follow the crowd. This... Read More
I use the P/E ratio as a secondary indicator for... Read More
Inverted interest rates? What's that? Who cares? Even if you... Read More
Before you buy another car you walk around the lot,... Read More
You have heard about a particular mutual fund from a... Read More
Ever notice how behavior in one area of life can... Read More
What! Me worry?Many of you remember the cover of MAD... Read More
Whenever I see mutual fund comparisons in the trade publications... Read More
I would like to share with the reader an article... Read More
Everything you invest in has risk so you want to... Read More
A recent cartoon in my daily newspaper showed two guys... Read More
Today's society gives special recognition to alcoholics, sexaholics, binge-aholics, shopaholics,... Read More
Its dinnertime and the phone rings. It's Joe Noname with... Read More
Picking a beaten-down stock requires a different kind of selection... Read More
It is commonly reported that the stock market averages about... Read More
Let's go into the details of why non-indexed mutual funds... Read More
If you are a baby boomer, time is not on... Read More
What account size do I need?How much money can I... Read More
A PEG ratio cannot be used alone but is a... Read More
Maximizing a stock market investmentThere are several factors an investor... Read More
Stocks & Mutual Fund |