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Posts Tagged ‘Equities’

Dow 12,000…Now What? Part II

Friday, June 10th, 2011

Yes… the image you see is what Dow 12,000 looks like coming from the other (less desirable) direction. Today marks the sixth time the Dow Jones Industrial Average has crossed the 12,000 level since the first time on October 19th 2006 (no relation to Black Monday, October 19th 1987).     We felt this was an opportune time to revisit our post from January 27 of this year entitled Dow 12,000…Now What?’ and to share our sentiments on the current environment for the economy and the financial markets. 

The market has declined now for six straight weeks and the decline accelerated recently when a trifecta of negative indicators came in worse than expected.  These areas of weakness included housing, employment and consumer confidence.  As of this writing, the tech heavy NASDAQ composite has slipped into negative territory for the year as the technology, materials and financial sectors have declined the most over the last month.  Utilities, healthcare and consumer staples have held up best over the last several weeks.  (more…)

2nd Quarter Update

Wednesday, July 14th, 2010
INDEX MTD QTD YTD
DOW -3.6% -10% -6.7%
S&P500 -5.6% -11.8% -7.8%
NASDAQ -6.6% -12% -7.39%

This quarter the S&P was down 11.86% after four good quarters in row.  The good news is that with the cash we raised in December and again in the beginning of May, accounts outperformed the market handily.  Also,  trailing 12 month performance is still strong and the first week of the current quarter has started out very good. Just a couple of days into earnings season, we have already seen some good earnings announcements. In a white paper that I wrote and has been posted on our website since April of ’09 entitled 5 Strategies for Wealth Recovery, I said:

“We do, however, believe that the stock market recovery will be long and arduous and that Dow 15,000 is a long, long ways away.  More realistically the major markets, after an initial “bounce back” from over-sold levels, will likely experience modest gains followed by a period of consolidation for the foreseeable future.  The ultimate goal will be to participate in the recovery to a greater extent than the decline and in doing so attempt to have investment accounts fully recover before the stock market has”

Well… a little over a year later, it looks as though things are playing out much as we anticipated and accounts are performing well.  The general consensus and one that I’m in agreement with is that the recovery is real. That being said however we do not feel that we are off to the races and several headwinds remain.  Notable concerns include the weak dollar/Washington money printing, continued weakness in Europe and a possible “double dip” in real estate”.  Above all other concerns are the questions of whether the US economy can continue to grow sans the billows of economic stimulus i.e. government intervention and when will corporations begin hiring?

In short, yes and not yet.  (more…)

5 Strategies for Wealth Recovery

Monday, April 20th, 2009

(Reprint)

We posted the following White Paper on our website in April of 2009 but felt compelled to repost in our new blog.  Not only did the market behave as we suggested it might over the last year but the specific strategies we recommended employing are arguably more important to implement  now (after the “bounce-back”  from over-sold levels)  than they were a year ago.

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Decision Investments believes that the recent strong performance in the stock market is finally signaling a legitimate end to the worst bear market in 70 years.  The stock market is considered to be a “leading indicator” and as such typically moves well in advance of the actual economy.  As of this writing, market indexes have moved more than 25% above their March 6th lows suggesting that the domestic economy is likely poised to strengthen over the next six to eight months.  

We do, however, believe that the stock market recovery will be long and arduous and that Dow 15,000 is a long, long ways away.  More realistically the major markets, after an initial “bounce back” from over-sold levels, will likely experience modest gains followed by a period of consolidation for the foreseeable future.  The ultimate goal will be to participate in the recovery to a greater extent than the decline and in doing so attempt to have investment accounts fully recover before the stock market has.

For likeminded individual investors who don’t want to passively wait while being at the mercy of the markets, Decision Investments suggests the following proactive strategies:

1. Dividends… Yield Matters

2. Tactical … Don’t “set it, and forget it”

3. Sector Bets… Be Industrious about your Industries

4. Concentration… Over-diversification is the enemy to performance

5. Bonds … The other white meat

(more…)