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  • Association for Investor Awareness - Week of 07/29/2010

    In This Issue:

    Double Dip, Or Onward & Upward?
    Many Winners Should Have Further To Go
    Inflation, Deflation – Or Neither?
    Beating The Bushes For Returns
    The Bottom Line

    After nearly six weeks of uncertainty, investors finally decided the outlook for the economy was improving enough to justify higher stock prices. Since our last newsletter in June, the Dow and the Nasdaq went up 3.4% and 2.1% respectively. Nearly all the gains came during the last two weeks.

    Double Dip, Or Onward & Upward?

    The stock gains notwithstanding, the recovery is still on shaky ground. With growth at an anemic 2.5%, it would not take much good or bad news to push the economy either way.

    To make the matter even harder to call, many industries are growing strongly, but others are still losing money.

    On the positive side of growth are the multinational blue chips that do a great deal of business overseas. Their profits are rolling in thanks to the healthy global economy. China, India, Southeast Asia, much of South America and many other regions have cooled off a bit, but most analysts think that's all to the good.

  • Africa: Sleeper Investment of the Century

    In This Issue:

    No Direction Home
    The Inflation/Deflation Balance Is Precarious
    Top Investments For Core Portfolios
    Africa: Sleeper Investment Of The Century
    The Bottom Line This Week

    Since our last issue, the stock market roller coaster made several more trips around the track. At this writing, prices are nearly back where they started with the Dow up marginally 0.3% and the Nasdaq off 0.7%. Although the market appears to be taking a breather at present, we think investors should expect a volatile summer.

    No Direction Home

    The stock market's gyrations reflect similar moves in most economic indicators. Not only are the key signals mixed, they often change direction from one week to the next.

    It doesn't help that every few days or so another black swan shows up to make investors nervous. The most recent unwelcome incidents include the disastrous BP oil gusher in the Gulf of Mexico, the high profile raid on the Gaza "peace" flotilla, the torpedoed South Korean patrol ship, and the plunging euro. There is a growing feeling among millions of people that political and economic stability in many parts of the world are hanging by a thread.

    At the same time, however, many multinational companies are reporting very good earnings. In addition, consumers are still paying visits to the mall although they are being more careful with their money. The summer vacation season is also off to a good start. In short, much of the evening news is grim but the day to day reality for most Americans is pretty good.

  • Association for Investor Awareness - Week of 01/15/2009

    In This Issue:

    Sometimes Good News Can Be Bad News
    Treasury Bonds May Be A Bubble
    It’s Time To Choose Shorter Bond Maturities
    Three Ways To Win If Treasuries Decline
    Investing In Times Of Extremes
    Staying Healthy During Impossible Times
    The Bottom Line This Week

    The optimistic mood that lifted the stock market two weeks ago didn’t last very long. In fact it might have been the smallest January bounce on record. After the 2nd, prices started to move back down again.

    There is some solace in noting that the market is still up some 20% from where the zigzag rally started on November 21. Despite all the turmoil, it may turn out that the bear market reached bottom at that time. We shall know soon enough.

    In any event, by the time last Friday afternoon rolled around, the Dow and the Nasdaq were down 4.8% and 3.7% respectively. During the first three days of this week, the market continued to decline sharply as more disturbing economic numbers were announced.

  • Association for Investor Awareness - Week of 11/26/2008

    Special Issue:

    When Deflation Comes,
    Cash Is King

    When everybody is certain the economy and stocks will move a particular way, usually just the opposite occurs. That's just what happened this summer when deflation suddenly overtook inflation as America's primary economic problem. Mr. Murphy, of Murphy's Law, seems to take particular pleasure in messing up the plans of investors.

    Deflation, of course, is just the opposite of inflation. Instead of seeing the value of money fall and the prices of goods rise, cash becomes much more valuable and prices decrease.

    Deflation is clearly in control today as homes, oil, and even precious metals plummet in price. Now food costs are beginning to sink. Jobs are being lost in most industries. Most experts think that wages will also begin to fall within a few months.

    The public is starting to show the effects of the deflationary squeeze. People are selling motor homes, pleasure boats, and many other big ticket items to raise badly needed cash. A disturbing 10% of Ohio's adult population is on food stamps. Of course, retail sales are also weakening.