Stock Correction Coming

Well stocks were mixed this week with heavy trading in all major markets. This week has seen a 217 point drop on the Dow only to have institutional investors come to the rescue after a sharp decline. The decline was due in part to more economic data showing slow growth in the first quarter going into second quarter earnings for American businesses. This combined with some good news that unemployment is staying at 8.2 percent is giving investors pause for thought on this new information. We see that most major investment houses and the federal reserve holding the line on pouring more money into the market. The reaction by the federal reserve this week was the usually muted yawning and we will wait and see if this is going away soon. Mostly investors just held their noses and jumped back in on the upside on late Thursday when the market indicated a upswing starting. Some recent data shows that the GDP for this quarter has actually gotten better with a 2.4 percentage growth over last years report. Still not enough to put joy in the hearts of investors and more money in everyones pockets but it still is better than the last three years. The last three years saw America with crippling double digit inflation and combined with more national debt increases to add to the problem. Credit has gotten harder to get for every part of the economy and banks failures have become more common as pancakes with homemade apple pie. So what to do this year? Investors watch out the seesaw of the markets is going to continue with more mixed economic data to come. However I see the third quarter of 2012 should have a more stable field for the avid marketeer. Why? Simple you will see the big companies shifting to cutting costs meaning that they will be hiring more workers but at a cheaper labor rate. Profits soured by tight credit will be offset by new venture capital being involved in the later part of this year. Overall if your going to invest go with diversity and by all means add plenty of dividend paying stocks to your portfolio. You might want to also go with managed bond funds like Vanguard or Janus that provide you longer term stability with lower market risk. In any investment decision think with your head not your heart so that you win more than you lose by a three to one margin for winning trading. Strap on you jet pack this week coming is going to be a shift climbing up in the markets so everyone should be poised to jump in on the new growth. Have a great Sunday everyone and enjoy it to the maximum. Smile .......

Kid in a Candy Store

I am just feeling really gitty about the stock market today decline. You see while all the investment houses stole the show by telling investors to go in big on the market over the past month. I told everyone to get out now so that they would keep their portfolio intact and wait until the market dropped enough on down swing. OK.. I hope everyone took my advice here and did not listen to the advisors in wall street fat cat firms who lined there pockets when the market nose dives. The numbers don't lie and neither does the chart data which shows the knee jerk tears and sobbing of the outside investment community.  The smart ones in business bailed out when the chart data started to reach toppings at the peak signaling at reverse decline going to happen so they kept their money. This market has been really strange this year so far with many changes in the past few months both positive and negative. Some advisors have suggested that the markets are going to climb to 15000 marker this year but I think it is very unreasonable to get everyones hopes up. The real story is unemployment is up and more businesses are cutting back or folding up shop permanently. This will effect the investment plans of many individuals and corporate investors who feel that they are skating on thin ice praying that they can all stay afloat. Having a good insight as I do I could see this coming and bailed out until the markets go down to the bottom then buy in on cheap stocks. You know folks this decline is temporary so take advantage of the cheap stocks then ride the wave to near the top. Every smarter investment guy will you that your nuts to buy on the down side supposedly because your losing your shirt. Trust in you knowledge he does not know his bank from his wallet so he is a loser doing his advice column. But if your smart like me you buy on the dip and bail out when the charts are screaming sell it before you get to the top of the wave. This after all is a business and anyone who is idiot that treats this any other way is just going to lose their entire portfolio. Take your risk at a calculated ratio so you get at least three to one on wins and losses. This way you grow your portfolio meaningfully while other poor slobs are popping tums and crying in their towel over their losses in the markets. My advice is buy in now while it is low this morning and watch your charts to bail out later this week. Yes there's going to be a few volitle stages but do the smart thing and stay with it unless you think the stock is going to the toilet then by all means bail before you lose everything in you accounts. Following this advanced advice here will make you money and after all that is the business you choose to be in which is a very risky but profit driven one.. Have a good day now and really reap the rewards you deserve..

Factory Output Slow..

You would think that with all the current hype that the economy is getting better. A good prediction of how the overall economy is doing is to look at factory orders for durable goods such as refrigerators and computers etc. Looking at the GDP which is how we currently measure economic output it tells a total different story which is factory orders are sharply down. What does this all mean for our economy and more over how is our trade partners affected. The answer will surprise you in the fact that when our output slows the rest of the world feels eventually the same pain as we all do. If you look at prior documented slow GDP you see a pattern of weakness in the rest of the worlds monetary system. Usually the banks are the first to react to these changes as they have the inside information to know how to deal with their own business interest well before you and I know about it. So watch the banks and the Federal Reserve to see if there is any changes in policy which would certainly show a attempt to heading off a financial crisis. A economic slow down allways has some prior individual indications just like if you look at a chart for a popular stock you want to buy.  Taking a deeper look into the economy you see that the current weakness is due to a combination of factors including heavy handed government regulation of business in America. Every time you add a new layer of regulations more businesses in this country fail which slows the GDP because you are losing output. The larger companies are more able to shift to meet the new government demands. However the small business entry is forced to use more creative ways to generate new revenue or fold up permanently. If the backbone of American business which is the mom and pop shops continue to fail at the current attrition rate we can see more of a deeper recession. This is a pending disaster that the government bean counters and the Federal Reserve have not taken into consideration lately. You can not have a soft monetary policy that does not fix the problem which shows a total lack of understanding of all our countries problems. For many decades we in this country have been like a dumb chicken running around on a drunken spending spree and passing the problem to the next generation. It is time to start supporting our own national interests and let the rest of the world sink or swim on it's own. That is the only way we are not going to have a total financial collapse in every sector of our economy. Having a clear understanding of our overwhelming financial mess we are in is no easy task. We in America do what is right by cutting our national debt and supporting ourselves not on credit then we can fix our financial mess sooner. So let's pump up the GDP by getting our financial house in order and pay off the massive debt we have incurred over many decades.