Days like these (the DJIA was down 400+ points again today) the most popular question I hear is: Where’s the bottom? When is the best time to get in?
First of all, the best time to increase your stock allocation is when Market fundamentals turn positive. They’re all negative right now: there is a currency crisis going on and inflation is threatening to throw gasoline on the fire. These are ripe market conditions for gold – not stocks. (scroll down and read my previous blogs for more information.)
When it comes to stocks, there’s no sense jumping into volatility when the Dow currently sits at 10,990. That’s just 300 points off the midpoint of the action zone. There will be a much better opportunity to buy low at the bottom of the action zone – or better yet, below it. That’s what you should be awaiting for.
Until then look to gold for growth because market conditions are good for it to keep moving upward.
The economy is weak, the currency market is a mess, and the government is way too active in the marketplace. Look at these Wall Street Journal headlines from today:
Justice Department Joins Probe of S&P, Rivals Over Crisis-Era Ratings
Exxon, U.S. Government Duel Over Huge Oil Find
Fed Eyes European Banks *
Ok, so the Federal Government is angry because S&P downgraded them – so you investigate them over rating actions from 2008? Maybe the S&P didn’t downgrade certain financial firms during that time because the government (via Fannie and Freddie) guaranteed subprime mortgage debt. Why should’ve the S&P downgraded financial firms holding debt that was guaranteed not to fail?
So Exxon finds a big oil reserve and the government now wants to claim it on a technicality? Is that how the government expects to increase energy exploration? Is that how they expect to bring down the price of energy?
And now, with major problems with our own currency and banking industry, the government now wants to look into European banks? What about our own banks? What about our own central bank (the Federal Reserve)?
According to the Wall Street Journal article noted by an ‘*’ above, (written by David Enrich and Carrick Mollenkamp), “Thanks partly to the Federal Reserve’s so-called quantitative easing program, huge amounts of dollars have been sloshing around the financial system, and much of it has landed at international banks…”
Are you kidding me? Why has our Federal Reserve given foreign banks our money without our consent?
This is a major problem in the Market today. We the People don’t know what’s being done with our money!!! That’s bad for the Market. Bad for all Americans.
Investors be aware!!!