The dollar reaches new lows. The housing market shows no sign of a bottom. Oil almost touches $84 before backing off. Interest rates go up after the Fed cuts. So naturally the stock market keeps climbing. But then, consumer spending came in strong, employment looks like it may be ok, inflation (at least by one measure) came in below 2%.
This is a quick summary of this past week. Sounds very ominous and confusing. The government tries to tell you there is not much inflation. Try stretching your dollar today. A kid out of Law school today starts at $140,000 to $160,000 on the East and West Coast. If that is inflationary I don't know what is. Oh yeah that loaf of bread for $2.00 and it isn't even a special kind.
Investing is looking at the overall economy and determining where to put your money for the future.
Now there are alot of cliches and sayings out there which are true.
History repeats itself. True but not exactly. So if you study history and look at the causes and the effects of certain happenings you can become familiar with the potentential outcome of events that happen which cause a reaction that affects the market. Very logical and very easy. Right.
The other cliche is "Buy low and sell High". Another very true statement about how to make money in the stock market. On the street they say they don't ring a bell when the market tops or bottoms to tell you when the market turns. But there are a lot of chart patterns that will tell you historically what has happened and you can play those technical indicators. One of the best technical indicators in the chart patterns is the double and triple top.
The Spx and the Dow are setting up for that. So that is the game plan. You are either going to be pro-active or reactive in your trades. Proactive now is to sell your stocks and short the market. This is also imprudent for 99% of all investors, because investing is a long term strategy of methodically building wealth over time due to compounding. Being reactive is selling when the pain is too great and you don't want to lose your investments. Either method is used by everyone other than a long term investor like Warren Buffet. He still owns his Coke stock that he bought in 1955.
So what does this all mean today. This decade is about asset inflation. Invest in long term inflationary assets which are gold and silver now. Do it now before you wish you had a year from now. As I emphasized on the first sentence of todays news, the low dollar, is the cause of the gold in dollars to inflate. Gold and silver will rise in dollars relative to the other currencies due to the weak dollar.
Tired of reading about gold and silver? I just want to let you all make some money.