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.
To answer that question, we tend to agree with value investors like John Hussman, who says that the U.S. stock market is overbought, overvalued and overbullish on a short-term basis. We expect to see a correction sometime soon, and any geopolitical news or economic instability will make those corrections stronger.
Speculation is what’s driving this market, and it’s at a very high level right now. Investors often get sucked into this, and need to be careful about being pulled into a risky environment. Risk is something that people often assess after the fact, unfortunately, but we think that right now there’s a risk factor of at least -10, maybe more if world news gets more negative.
This is a podcast summary. For more information, please listen to the entire broadcast here.
For many of our long-time clients, you know that April is the anniversary of the financial newsletter that Doug’s mom and dad started from their dining room table in 1977, and that Doug has stewarded since 1990. Doug got a chance to reminisce about the newsletter and the family business with his dad over Easter weekend – the world has changed and evolved, but some things stay the same.
In other family business news, Doug’s two sons, David and Michael, struck out on their own in their own business endeavors in March of this year. We wish them well and the best of luck on their new venture, and we continue to focus our efforts here at Fabian Wealth Strategies, investing wisely and advising our clients and readers, just as Dick Fabian did for so many years.
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There’s been a mix of positive and negative market action of late, and the U.S. is the top performing stock market in the world. It’s up on sentiment, expectation and money flowing from the Federal Reserve. We need to realize that the rest of the world is mostly down and that the fundamentals are looking risky for investors. There’s a disconnect between commodities and stocks – usually they move in the same direction, but right now they’re not. Growth is not that good, so we expect that stocks will fall to match commodities, rather than commodities rising to meet stock prices.
This is a podcast summary. For more information, please listen to the entire broadcast here.
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.
The stock market is impressive right now, and we understand that investors are afraid of being left out. Better opportunities to enter the market are coming, and now is not the time to put capital to work – in our opinion.
Market crashes are once-in-a-generation events – good for headlines, but not typical. Remember that markets are psychological, not logical. You can live with lost opportunity much easier than you can live with lost capital. We think that you should be more concerned about lost capital than anything else right now. Have a sell plan and protect yourself against changes in the market.
(For more information on this topic, check out our April issue of Successful Investing.)
This week, we got an email from a client, asking about taking on more risk in their portfolio. We believe that this is not the right time to be taking on more risk. The markets are risky right now and there is a lot of uncertainty out there.
However, this email got us thinking. Investors have a tendency to get into the market too late. For instance, many people got into real estate market too late in the recent boom a few years ago, which had unfortunate consequences in their portfolio. Here are some other common “unprepared investor” problems: They don’t know when to sell, they try to commit to an investment for the long-term and they sell at worst possible time when they get scared. In short, most unprepared investors get in too late and out too soon.
Don’t allow your portfolio to be another statistic of unprepared investing. This is not when you want to make a serious commitment to risk assets. Be careful out there, be safe and be prepared.
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. This is a podcast summary. For more information, please listen to the entire broadcast here.
All the financial markets around the world are positive as of now, which continues the euphoric excitement on Wall Street about our recent stock market highs.
Here’s the good news: unemployment rate declined, U.S. dollar high, jobless claims fell, U.S. stock market high.
But, as always, there’s a flip side. Here’s the bad news: productivity falling in U.S., factory outputs declining in U.S., Europe’s economy is not doing well and we see recession in 60% of the world.
Even though, as our title indicates, many people are partying and feeling good about the stock market, we believe that the fundamentals are weak and that risk is still very high in the markets. Exercise extreme caution, and remember that equities are in an uptrend because of central bank interference in the markets. Better opportunities are still to come, so hang on for the ride and don’t get swept up into the “party”.
If you’d like to find out more about how we can help you and your money face upcoming challenges, act now by listening to the Monday Morning Market Outlook podcast, and then by giving us a call at 800-391-1118.
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. This is a podcast summary. For more information, please listen to the entire broadcast here.
We’d like to direct your attention to a very important article in the Los Angeles Times from this weekend:
“Has the bull market in stocks become ‘too big to fail’? The Federal Reserve’s efforts to keep the U.S. economy growing may not work unless the stock market keeps moving higher.”
“Officially, the Federal Reserve isn’t supposed to worry about keeping stock prices flying high.
But when Fed Chairman Ben S. Bernanke was asked about the market’s outlook last week on Capitol Hill, he sounded like a lot of bullish Wall Street investment strategists.”
We encourage you to read the whole article here, and remain alert and informed in the markets right now.
This is a podcast summary. For more information on this topic, please listen to our full broadcast.
All over the mainstream media, we are seeing celebrations about the highs in the stock market. “Buy and hold” often doesn’t work well for the individual investor. Don’t listen to the talking heads, use your common sense and pursue smart investments that are low-risk. Have a clear exit strategy, don’t simply “buy and hold”.
The Stock Market correction we’ve been expecting is here, in our opinion. There’s a lot of concern out there about the sequester, European crisis and China’s stock market. The news is going to get louder and worse over the coming months, and even though 10% correction is a fairly regular occurrence, but in this instance investors are emotional and likely to panic over what is really a normal correction.
Do not give in to panic. We think that the opportunities are in front of us, and we encourage you to be conservative and ready for investment action.
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.
