People tend to think that the most recent past will continue into the future, but we want to caution investors against rushing in with peer pressure. New bull markets are emerging, such as Japan, clean energy and natural gas, and we think that it’s really wise to look at the new trends rather than old news.
As always, education is very important to us, and we encourage you to send any questions or concerns to askdoug(at)dougfabian(dot)com and we’ll do our best to answer them on the podcast or here on the video update.
A lot of people are rushing into stocks right now, but patience is the ultimate virtue. We think that this unusual market will still pull back eventually, so don’t be fooled by the rush higher.
New bull markets are good markets to invest in right now, such as Japan, clean energy and natural gas. Getting into a new bull market is a much better place to enter the market than an old bull market (such as the U.S. right now).
We also want to encourage you to sign up for the Making Money Alert as you think about investing, and check out our five ETFs for income here.
When you think about your portfolio, it can be easy to lose focus on what’s important and your goals. Just because there are some scary trends out there doesn’t mean that you can’t succeed and have the life you want. As you think about your portfolio, here are some important steps to remember as you invest:
Know what you need and keep your objectives in mind.
Take inventory of your assets
Don’t approach your long-term goals with fear – stay positive and continue to be smart, consistent and motivated as you work toward your financial goals.
Even with the backdrop of weak economic news, nothing seems to bring the market down. This is because of massive central bank influence, and it’s incredible to watch these organizations around the world as they buy bonds and continue various methods of quantitative easing.
“Sell in May” strategies are in effect right now, and it’s a fascinating phenomenon to watch, so keep your eyes open for that.
We are in correction mode in the stock market – however, there are opportunities beginning to emerge, and we need to watch out for those to advance our portfolio success.
There’s a lot of worry about a global slowdown, but there isn’t any inflation going on, which is an interesting development. This is a risky and fascinating time to be investing, and it’s important to be watchful and educated on these matters.
Commodities have all been selling off lately, and this signals a slowdown in the global economy. Gold particularly is a commodity that shows us what people are feeling emotionally. With all of the Quantitative Easing and national budget deficits, many national economies are engaging in unsustainable practices. Remember that gold is essentially “real” money, and will probably be a good investment once again in the weeks and months to come.
The Asian markets are in the process of resetting, as geo-political and economic forces effect those markets. As we look at the next three quarters of 2013, as long as the world doesn’t enter a global recession, we’ll likely get great buying opportunities in Asia in the months to come.
In contrast, the U.S. market has not reset itself. It’s not in a good position for buyers, because volatility and risk is very high, and we think that a reset is on its way – and that will be a great opportunity to inject capital into the market.
If you’re feeling left out of the stock market, don’t fret. This is an expensive and risky time to jump into the stock market, and we think that better investment opportunities are still to come.
The market is still being fueled by the actions of the Federal Reserve, and we believe that an amount of patience and knowledge will pay off for investors. There’s an important editorial by Ron Paul about the “Great Cyprus Bank Robbery” that sheds some light on what’s going on in Europe and what we need to be aware of here in the U.S. We are not trying to be alarmist, but we do think that learning from the issues in the banking system in Europe is wise for investors.
We want to stress the importance of saving for retirement. Look at your IRAs, 401ks, etc. and make a plan for your future. We mentioned last week that Americans aren’t saving enough in general, and this is a serious problem. Don’t be one of those who are left without options in retirement.
In the markets, emerging markets are not doing as well as developed countries. We think that the emerging markets will be an opportunity in the months to come, so we’ll be watching that closely. As you know, we believe that opportunities are coming, and now is not the time to get in too deep in the markets.
For the most part, we advise you to stick with your bond holdings and stay tuned for more information on investing.
This is a scary topic, but it needs to be discussed. Widely, most people are not saving enough for retirement and it has become a difficult trend to deal with. We suggest that you save for retirement ahead of your kids college education or other desires, because when the time comes, that money will be what you will live on.
In Cyprus, in Europe, there’s a proposed tax on depositors, and it is causing a lot of tension and upheaval over there. Europe is not fixed and we need to not be lulled into false confidence because the EU has been largely quiet of late. We are also still advising caution in the U.S. stock market, even though it is performing well this year.
As always, email any investment questions or concerns to askdoug(at)dougfabian(dot)com. We want to help you make the best possible decision for your portfolio.