After watching The Final Trade on Friday night I started to recall what is their overall record.
This panel of expert traders are very inteligent and in touch with the market. In fact they are some of the big time money movers of the market. So when they say go defensive because the market is going down they mean get out of small caps and go into large caps with alot of cash so that if there is a major recession the large companies have staying power. It all makes sense.
Last year they were all made to pick their favorite stocks to be in for the year. Not one said gold or silver stocks.
If you had bought just the XAU you would be up 50%, GG up 46%,
I personally don't like to change my investments around just because it is the New year. In fact coming up in the next 4 weeks is the near term bottom of the market. Why do I say that.
First of all on August 16th 2007 there was a bottom in the market. The sub-prime mess hit and something had to be done with that. The general banking giants couldn't contain it anymore so the Fed came to the rescue. The Fed started to help save the day by pumping more money into the economy and lowering the interest rates and we had a rise to new highs in the SPX in October. But the problems were still there. The ripple effect was going to take its toll. Now all the ripples are comiing out and the market is reacting to the negative news. November and December and Jan were negative news months. Everyone was waiting for the Santa rally. Then everyone was wainting for the New Years rally. Thus the intervention by the fed prolonged the market upward bias for about 3 months. Otherwise the market would have bottomed in a bear market scenario just in time of November just like 1987. Greenspan in 1987 waited until there was so much damage that he finally poured the money into the economy and saved the day duriing that month of Nov 87. Today the Fed did it 3 months quicker but the casualties have not been wrung out of the market yet. The spiral down will not be as brutal as 1987 because the fed came iin earliear to give it a boost. But the Fed can not change the markets overall bear and bull direction completely. Only the mass of people can do that.
We have been in a recession since August. Just ask your local business people how business has been. The government collects data and when certain indicators hit certain levels then (the economists) they declare we are in a recession. Then its too late to do anything about your investments because the market is down.
So what to do now. Save your money and wait for Feb to start buying areas of beaten down and value plays with good solid dividends.
The market will start to react with bottoming formations during Feb. On the average the market corrects 25% in a bear market. lasting an average of 4 months.
I feel the market will go to 1320 area and give us a rally from there. This doesn't mean we are screaming to new highs. This means you will hear how terrible the market is and everyone is losing their shirt in the market and then you start to buy some of youor favorite stocks. (Buy low sell High)
Happy timing of your trades. Otherwise wait to buy your long term investments. Hang onto your gold and silver stocks.