Investors are very optimistic in bull markets and allocate much of their portfolio to stocks, increasing their risk. Analysts and economists expect more spending which will consequently push GDP and inflation up, but low rates push people to save more for their retirement. If the GDP and earnings don’t grow as expected, we could see… Read More »Are You An Investing Optimist? Check Your Portfolio
The dollar has been positively correlated with stocks for the last 4 years which is unusual. Potential FED interest rate increases don’t make international diversification a great idea right now. Any sign of a U.S. recession should be a good time to think about international diversification with emerging markets. Introduction On big news sites like Bloomberg you… Read More »The U.S. Dollar: Should You Stick To It Or Diversify Now?
Signs of Fragility in the Economy Point to an Impending Bear Market. What To Do Now To Protect Yourself.
The last jobs report was good news but it also indicates higher costs and full employment. An “easy to hire, easy to fire” mentality is in the air. Healthcare, cash or short term trades should be the best options in this situation. Introduction Last week the Nasdaq and S&P 500 reached yet another record high.… Read More »Signs of Fragility in the Economy Point to an Impending Bear Market. What To Do Now To Protect Yourself.
Car sales are in a downtrend and PMI is falling, which ties the FED’s hands. Japan has just entered into direct economic stimulus with $273 billion. The Bank of England behaves like the economy is in a depression, cutting rates and printing money. Introduction Yesterday we discussed how China isn’t as big of a risk… Read More »Where The Risks Are: It’s Not Where You Might Think…
Risks are cumulating and getting bigger. U.S. GDP growth is slower than expected, earnings and oil prices continue to decline. Japan is unable to grow while BREXIT risks are still unfolding. Introduction It is difficult to find good news lately. The last really good news was the June jobs report when 287,000 jobs were added.… Read More »Euphoria & Denial Point to the Last Days of the Bull Market
Housing is showing inflationary signs but still offers an opportunity to profit from the rising trend as a downturn is unlikely and not expected in the short term. Amidst all the positive news, manufacturing turned negative. Yet despite this, stock valuations keep going up, increasing the risk. In the week ahead: the FED’s decision and… Read More »The Economic News is Very Good, But Keep An Eye On the FED and GDP This Week
All factors are indicating an artificially created asset inflation. Earnings are expected to decline with economic outlook being constantly revised downwards. Gold is gaining alongside stocks which confirms that all assets are inflated. Introduction Amidst all the turmoil from BREXIT, negative interest rates and global downward economic growth forecasts, the S&P 500 has reached a… Read More »As The S&P 500 Reaches New Highs, Asset Inflation Continues
Almost 30% of global sovereign debt comes with a negative yield. The situation is much worse in Japan and Europe than it is in the U.S. Investors should enjoy the asset inflation party while it lasts but also be prepared for the worst. Introduction Negative yielding debt seemed impossible and illogical for a long time,… Read More »Negative Yielding Debt: A Party for Investors or Pure Stupidity?
The first hard data after the BREXIT won’t be available until October, but property funds are already frozen. The decline of the pound will lower UK GDP and will spill over into Europe. Italian banks are in trouble as 25% of GDP are nonperforming loans. Introduction As two weeks have passed since the BREXIT debacle,… Read More »Could the Economic Climate in Europe Be Contagious?
Bonds are becoming riskier as yields are falling. Inflation is at 1.2% and very likely to get higher as full employment is approached. The FOMC predicts stability which could create a great environment for traders. Introduction On July 6 the Federal Open Market Committee (FOMC) June meeting minutes were released. As they give clear insight… Read More »Watch Out: The FOMC’s Current Stance Could Impact Your Portfolio in the Long Term