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 .......