Looking for a 20 percent Correction

   The correction I keep expecting to arrive reflects the many negative macro factors that are here, even though the rising market takes our eyes off of them.

  We are still looking at an anemic employment situation and GDP growth. The economy is not really in a recovery, but is more in a stability mode.

  A recovery instills confidence, but confidence continues to be low. What little confidence there is, is very fragile.

  We still have concerns in Europe, China and fiscal concerns here, plus the shenanigans in Washington, and add to that a declining revenue growth in the U.S.

  The combination of world events far and near, are enough to cause trading markets to fall, which would be a somewhat healthy correction.

  I know that Goldman Sachs lifted its S&P 500 target for this year to 1,750, and for 2014 is looking for the S&P 500 to go up another nine percent to 1,900. Goldman Sachs then expects the S&P 500 in 2015 to rise another 10 percent to 2,100.

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  What are the odds…very unlikely, and be advised that even if Goldman Sachs were to be correct, there will be pull backs along the way.

  Bruce Cortez @ …Bruce@YouControlinvesting.com

Will the Market Rally Continue?

 As the Market rises, some will be getting in to follow the trend. While following the trend is important, investors need to keep a watchful eye on what’s happening.

  As more investors get into the market because times are getting better, is typically the time to be getting out of the market.

  What we have to understand as investors, is that there’s really no reason for stocks to be up as much as they are this year. (Except that the Fed has created an environment in which stocks are the best opportunity, and an economic indicator housing, is improving).

  You got to look and find out why? Where’s the growth in the economy, earnings are starting to condense with expectations being lowered.

  Be very very cautious, but do not pullout of stocks. Today we have a risk on risk on off environment, with a very high chance we can see a little bit of pullback later on.

 

  The catalyst to pull down the market is going to be about news. Remember back in 2008, one of the problems we had was debt in the U.S. and debt in Europe. The debt in both has only gotten worse, not better.

  Were not out of the woods to the debt problem and where this country and especially the developed countries are going. This is a major problem, which we cannot forget.

  Bruce Cortez

http://www.Twitter.com/StockMktTeacher

A Correction is Over-Due

A Correction is Over-Due

  The S&P 500 has risen to an important resistance level, as it touches nearly a 5-1/2 year high, and is less than 2% from a record close.

  I have pulled my money out of the market  and have been waiting for a pullback to offer a reentry level at cheaper prices.

  Pulling out of the market as it’s on the way up (Selling Strength) allows me to lock in profits, and then buy more as the market is falling (buying weakness).

  People tend to do the opposite, Buy on the way up, at higher prices because all looks good, then sell on the way down, due to fear or panic, losing money.

  For the health of the market, we need to have that pull-back that we haven’t seen. As the market appears less of a risk to investors coming in now (raising equities), this fights the inevitable pull-back that we need.

  If we watch the market performance recently, it’s been moving up a bit, then pulls back a bit, but on average the trend has been a very painful and slow climb.

  This climb is why I have been suggesting that investors not get in now, and for those that have been in, they should put their money on the sidelines.

  Professional investors have been buying protection against the inevitable pull-back.

  Remember, the market has already provided a 7.5% return in the last two months, so lets not get greedy and lose that gain. Lock in your profits, and put your money on the side to lock in those profits.

  When you see the market pull-back, get back in on the way down.

  Bruce Cortez

05-Mar-2013

Picking a Fund

  Picking the best fund in what’s offered in a 401K or similar work provided retirement account is left to those of us that don’t have an understanding of how stocks and bonds work, and how they make our investment grow.

  Some schools are starting to teach this information to our kids, in an economics class, but for those of us that didn’t have the opportunity or interest to learn, there are ways to pick the best fund of what is offered to us.

  The first category to look at is the “High Risk” investments in the retirement account. This is where the most growth potential of the retirement account will take place. (“Low Risk” would be the same as stuffing money in your mattress), No growth.

  High risk means that the fund you’re investing in will be global. This means your money will be invested in Brazil, China, India, Italy, Russia, and other places including the United States.

  The value of the fund could change because of events that happen in the country in which the business you’re invested in operates.  Another change to the value of the fund would be the currency exchange rate. Because of these “Risks” is why you have the potential to make money in these funds.

  If you don’t have a great interest to put in a lot of time selecting the best fund in your 401K or similar retirement account I have an answer for you, the MONEY MANAGER.

  The Money Manager or Management, is the person that has a plan for the fund (called a prospectus).

  The Money Manager will either be very good at what he does (able to make money for investors in the worst of times), or he can be doing a poor job, causing investors to lose money.

  Start by getting the symbol for the fund you want to consider. This will be found in the information your work provided, to pick your investment from. An example would be Fidelity ContraFund, symbol “FCNTX”.

  Now on to a site that does the best job of providing fund information; http://www.MorningStar.com , here we will have all the information about the fund you could possibly ask for.

  When looking for the fund’s management, look for a name of an individual, not “Team” or “Members", you want a name. No name, move on to the next fund.  Also, look  for tenure of  the manager of five years or more, then what you see about the funds performance at MorningStar.com is his performance not someone else.

  Now at the top of the page there is a window that says “quote”, and in this window type in the fund symbol… in this example; FCNTX.

  Everything about the fund can be found here. Now go down the page looking on the right half till you find “management”. The Money Manager for our sample fund is William Danoff.

  Now go to http://www.Google.com and type in the managers name into the search window. The result will be everything you need to know about William Danoff. What we learn is that FCNTX is a very good fund to put our money into because of William Danoff, plus we have lots of information at MorningStar.com to back up his management performance.

  I hope this is helpful, and if you have questions please contact me.

  Good investing,

     Bruce Cortez

  Follow me at http://www.Twitter.com/StockMktTeacher

Fiscal Cliff

   Don’t expect a deal on the “Fiscal Cliff” issue until at least December 20^th. The amount of work needed and the amount of legislative days that exist makes it conceivable that nothing will come out till December 20^th.   This is the schedule going forward.

  Nov. 13 – Year end, Lame Duck period for Congress begins...Nov. 19 – 23^rd, Thanksgiving break…Nov. 26^th, Fiscal Cliff debate likely to begin…Then Jan 1^st, Fiscal Cliff IMPACT!!!! ….JAN. 2^nd, Spending cuts triggered ($78 billion)…Jan 3^rd, 133rd Congress takes office…And finally Jan 20^th, the Inauguration.

  The Fiscal Cliff tax increase equals 1.3% to 1.5% of the Gross Domestic Product, and the last tax increase of this size caused a 35% market drop in one year.

  Today stocks surge on Fiscal Cliff optimism, and stocks have biggest gains since September 13^th. The S&P 500 for example erases last week’s losses. Again, the markets are moving on news. Positive news we go up, Negative news, down.

  Looking at Europe, expect Spain to have more problems in the next couple of weeks, and in another part of the world has Israel stepping up targeted attacks on heavily populated Gaza.

  World events will continue to move the markets.

 Bruce Cortez

 Follow me at Twitter.com/StockMktTeacher

The Markets today and the Direction of our Economy

   If you look at what the markets have been doing since the election, I think it’s a clear indication that investors are worried about what’s not going to happen.

  If you look at what the stock market did, it immediately dropped, because investors don’t know what is going to happen…more of the same, or something different.

  Investors need some kind of solution about the ‘Fiscal Cliff’, or some kind of indication that we’re getting a solution. If not, the markets will get uglier.

  Fortunately for the U.S. it looks like we’ve gotten away from the European issues (problems of just spinning their wheels with no improvement), because it looks like the U.S. economy, can gain some traction. But if we don’t see something by our government soon, all will grind to a halt.

Bruce Cortez

Follow me at http://www.Twitter.com/StockMktTeacher

Today's Investing Fear

Today’s fear of the average investor with a 401K, 457 or other work place retirement account has money sitting on the sidelines.

  At today’s interest rates leaving money in a savings account or the savings part of the retirement account will not create enough interest to allow money to be made for a financially good retirement.

   The individual needs an understanding of how the stock market works and what you can do to create profits and limit loses. I suggest reading books.

   An easy read book with lots of good information is “The Truth about Money” The 4^th edition by Ric Edelman. You can get the book as a paperback or download to your reader.

  One of the reasons that people fear putting risk into the market, is because of the pull-backs the market has from time to time (corrections which are normal).

  Without risk, your portfolio will not grow, and that is what savings is. Savings is a place to keep your money, but a place where the value of your money will not increase. Similar to putting your money into your mattress.

  Currently there is a little too much uncertainty in the market. What will Greece and Europe do? Who will be our President, and how will that person run the country, and a big issue, what will happen to health care (ObamaCare).

    Talk about a “risk on trade” or a “risk off trade” by those on the radio, TV, and internet makes people fearful about the future. The fear comes from a lack of understanding about the market.  In the short term (days, months) things can look good and bad depending on the news we get. But investing is about the long term (years).

  Over years, the little bumps along the way have very little effect or no effect on our investment. Quality stocks continue to rise creating greater wealth for investors. Buying stocks that pay dividends…(dividends is like getting paid interest) while you wait for the stock value to rise is how to create wealth in today’s choppy market.

  Stay invested in quality stocks or Funds that have stocks paying dividends within the fund to create wealth.

  I’ll blog more about where to get the information you need, but in the meantime stay invested.

  Bruce Cortez

Twitter.com/StockMktTeacher