We’ve been talking about the European debt crisis for several months now, but we’ve recently coined the phrase “European Blind Side”. You might wonder why we’re so concerned about investors being caught off-guard by developments in Europe, so we thought we’d use an analogy from out here in California.
We see it all the time – it’s a sunny day on the beach, and people have driven in from all over to come to the ocean. Tourists and locals alike are stretched out on blankets in the sand with coolers and umbrellas, ready for a great day. However, it inevitably happens that those who aren’t as familiar with the water, or who just don’t pay attention, will place all of their beach-day accessories too close to the shoreline at low tide. When the tide starts to move in or a big set of waves appears – and they don’t even have time to react – their towels are soaked, their cell phone has gone for a swim and their beach day could very well be ruined.
We think that this is what will happen to many investors who aren’t watching Europe closely. They feel lulled to sleep by the “sunshine” of relative security and up markets here in the U.S., and may very well have their holiday ruined by a big, ugly wave from Europe. Investors who aren’t paying attention to Europe are going to be hit hard and not know what happened or why.
The moral of this little analogy is simple: pay attention and stay educated and aware. Listen to our recent teleseminar for more in-depth analysis of what’s happened in Europe and what is soon to come, and make sure that you are prepared to preserve your capital and keep your towel dry, so to speak.
This is a podcast summary. For more complete details, please listen to the full podcast here.
Lately, Monday mornings have been busy with news, and this week was no different. We are seeing a lot of change in the world right now that could change our investment portfolios, and we do our blogs and podcasts in an effort to help investors stay educated and aware. We think it’s essential to stay on top of the latest happenings and understand how it impacts the markets, so let’s a take a look at the news:
Despite what seems like an onslaught of bad economic news, we believe that growth opportunities are in front of us. We think that investor’s highest priority should be capital preservation, and we are waiting for our buying opportunities to come later this year.
This is a podcast summary. For more complete details, please listen to the full podcast here.
Don’t forget to sign up for our next teleseminar, titled: Strategies for Growth in Uncertain Times, and will be presented by Doug Fabian, on Tuesday May 8th at 1:00 p.m. Pacific (4:00 p.m. Eastern).
While this teleconference is FREE, attendance is limited, so please be sure to register HERE and reserve your spot today.
As many of you know, we have a comprehensive list of ETFs on our website. Our latest edition of the Fabian ETF report recently came out, summarizing 1200 funds and highlighting 100 new ETFs for 2012. To get a copy of our ETF report, click here.
Another great way to hear our strategies is through our exclusive teleseminars. Our next teleseminar is titled: Strategies for Growth in Uncertain Times, and will be presented by Doug Fabian, on Tuesday May 8th at 1:00 p.m. Pacific (4:00 p.m. Eastern).
If there is one statement we can all agree with – we are living in uncertain economic times. Half of the countries in Europe are in recession, China is feeling the effects of slowing global growth, and the U.S. is struggling with trillion dollar deficits that are needed to keep the economy afloat.
In what will likely be a very challenging summer for the markets, having the right strategies in place to both preserve and grow your capital is absolutely critical to your investment success. Now is the perfect time to decide how you should position your investment dollars to achieve your financial goals for the remainder of 2012.
In this special one-hour presentation, you will learn:
Doug’s three favorite growth strategies over the next three years.
How to stay ahead of inflation with your portfolio.
A global economic update and how world events can impact your money.
The latest product innovation in the exchanged traded fund world.
Plus much, much more
While this teleconference is FREE, attendance is limited, so please be sure to register HERE and reserve your spot today.
We all know the phenomenon of “sell in May and go away” in the stock market. But is that really an effective strategy? Here’s a couple of articles we read recently on the subject:
“The argument for “going away”: Over the last 12 months, investors who held to this belief made out pretty well. From May 1-November 1, 2011, the Dow lost 6.7%. From November 2011 through April 27, 2012, it gained 10.7%.
If we open a historical window – specifically, The Stock Trader’s Almanac – back to 1926, we see the S&P 500 rising 4.3% on average during May-October and gaining an average of 7.1% from November-April.”
“On Wednesday April 18th, Jeffrey Hirsch provided election year statistics for the “Worst Six Months”, May to October. The results of that research began in election year 1952 and ran through 2008. 1952 was chosen as the starting point of the study primarily because the U.S. economy (and the global economy) was substantially different prior to that year than now. From 1901 to 1951 farming made August the best performing month of the year. This is no longer the case and August is now the second worst month of the year. In response to inquiries about years prior to 1952, the table from that post has been updated to include all election years from 1904 to 2008.
By including an additional 12 election years in the table, the results differ greatly, but this was expected because, Augusts’ top-ranking performance, the roaring twenties, a Great Depression and two world wars made those years significantly different (a great understatement). In fact, “Sell in October” would have been appropriate. Prior to 1952, May-October was up 32 of 51 years with an average gain of 3.3 % while November-April was up 29 of those same years averaging a gain of 2.4%. Since 1952, November to April (as of today) has been up 47 times and down 13 with an average gain of 7.5% while May to October has been up 35 and down 25 with an average of just 0.2%.
Before deciding if “Sell in May” in this election year is in the best interest of your investment objectives consider this; since 1940, there has been only one double-digit gain from May to October and the average gain is a paltry 0.3% (excluding the best and the worst, the average is 1.2%).”
Graphic from Stock Trader's Almanac
We believe that investors should be careful to not invest or pull their capital based simply on a season, time of year or “gut feeling”. This is definitely an interesting and risky time in the markets, and it’s important to know about the trends and thought-processes – but not necessarily to follow them.
Thanks for reading our podcast summary. If you want more details on what is discussed on the blog, please listen to the full podcast here.
Listen to Doug talk about the short-term and long-term trends, divergences between the U.S. markets and international markets, AAPL news, the Federal Reserve meeting and policy, European debt crisis, and volatility in the markets.
This week’s video covers a lot of ground, so watch it and remember to keep a close eye on the market for better buying opportunities later this year.
Doug Fabian’s next live public speaking event will be in Las Vegas at the Money Show, where we’ll have about six different opportunities to present, and a special opportunity for our subscribers. Please check out moneyshow.com to register or for more information.
We expect to invest in emerging markets this year, and want our audience to be aware of changes and trends in this area. Over the last 10 years, here’s what’s happened in emerging markets:
2003 ended the bear market and began a new bull market in the U.S. – 400% increase in emerging markets that year.
2007-2009 emerging markets fell 65%
2009-2011 emerging markets moved up 135%
There are over 100 Exchange Traded Funds for the emerging markets. You can invest broadly or even focus on a single country or industry group using ETFs. We think this is incredible, as it gives investors a chance to invest in as specialized of an area as they like.
While established markets like the U.S. and UK have had centuries of equity investing, the emerging markets are relatively new, and have much greater earning potential than developed markets. We believe that emerging markets offer great potential, and that this is an area that you need have in your portfolio long-term.
This year we plan to invest in emerging markets, but our approach holds that we do not want to buy until the rest of the market starts to panic. When that happens, emerging markets will go on “sale”, and we think that is the best time for investors to jump at this opportunity. If you have questions about when to invest and why, please call us at 800-391-1118.
Thanks for reading our podcast summary. If you want more details on what is discussed on the blog, please listen to the full podcast here.
Politics are swinging between left and right as the European Union tries to deal with their debt crisis. Watching this news unfold is important for investors – we think it’s important to know how austerity, deficit spending, taxation and other economic news affects your portfolio.
That said, here’s some of the news we’ve been following about the political and economic climate in the Eurozone:
Just to bring this a bit closer to home, local politics affects our portfolios as well. Here in our home state of California, we have similar deficit, taxation and spending issues to the EU. Here’s a few of those news stories:
Be careful in the markets and stay aware of how politics affects your portfolio – listen to our podcast every week for up-to-date details and analysis, or call us today for a personalized consultation at 1-800-391-1118
It seems to us that right now, the U.S. is a bullish bastion of strength around the world. International markets are all in short-term down trends, and, in contrast, the U.S. is in a bullish up-trend. This is unusual – usually all markets move in similar directions, and because of this, we think that the markets might be topping out soon.
We are also seeing increased volatility in the markets – last week was the worst-performing week of the year in the markets, but we’re still also seeing some highs. This kind of up-and-down action, plus leaders like APPL and GOOG starting to wane, tells us that the market is a very risky place right now. We think that the market is about to top out and start to correct.
First, Europe represents 25% of the global economy. Spain is the fourth largest economy in Europe and it is in economic shambles. The Spanish government is cutting severely in entitlements (unemployment benefits, pensions, etc.) and there is no job growth in Spain. People in Spain are more conservative with their money right now, causing a contraction in their economy, looking to contract a total of 7% this year. (To put that 7% in perspective, that’s about how much the U.S. contracted in 2008 – we all know how that affected the markets and economy.)
Second, Apple Computer is a phenomenal company, and it’s almost a stock index in itself. Apple stock alone accounted for 36% of all the earnings in the S&P 500 in the first quarter. We bring this up because if APPL was to falter, we would see some serious issues in our stock market.
Lastly, we want to remind you that stock markets go down 3-5 times faster than they go up. This is an unfortunate reality, but one to keep in mind as you watch the fundamentals and the global economy in changing times.
