1) Is the stock market headed for a correction?

It seems so easy to do but most find it hard to accomplish. How do you stay emotionless when it comes to investing? What will help you use this time tested money management technique? Give us a call!

1. Yearly markets returns are negative about 30% of the time. While investing in financial markets, you should expect to get a negative return one out of every three years. It could be two negative years out of six.  
2. It is important to diversify, then diversify, and finally diversify. That means own cash, stocks, bonds, commodities, real estate, precious metals, and if possible businesses.
3. Long term, financial markets have given the best returns.
4. There are always good reasons markets go down; there are also good reasons markets go up. No one can predict the financial markets correctly all the time.
5. To make money in financial markets one has to BUY LOW and SELL HIGH. That means buying when everyone seems to be selling (markets have fall sharply) and selling when everyone is bragging about their stock portfolios. This seems trivial but it is very hard to do because buying during sell offs can lead to short term losses.
6. Worry more about your personal economy and less about the global economy. Focus on :

• growing your income 
• spending within your means with an appropriate budget
• paying less on your taxes using proven strategies
• being adequately insured to protect your assets
• diversifying your assets
• investing for your old age (retirement)
• protecting your family and estate

It is important to have a financial plan in order to stick to these fundamentals concepts.

A personal financial advisor can help you stick to these fundamentals.

For a FREE consultation call the office: 617 505 4478 or call me on my cell at 201 388 6554.

Comments on previous post of 3/4/2011:

Oil prices did indeed continue to rise jumping about 7% in a month.  As the ECB increased its overnight lending rates the dollar went from $1.39 to $1.44 against the Euro, a drop of 3.4%.

Comments on the economy:

As in 2007, the weaker dollar contributed to higher oil prices. If the dollar breaks support and starts to drop at a faster rate (from ECB hinting at higher rate while weak employment in the US keeps interest rates low); then we will see higher oil prices for while to come. 

This week's economic data was not as bad investors and speculators expected. The mood in Wall Street changed from concern to relief. Hope is revived that the economy is rebounding. Tomorrow's job numbers will (hopefully) give a clear direction.

http://bit.ly/9R1wxN

This coming week will provide new economic data points:  existing home sales on Tues., durable goods orders on Wed., and GDP figures on Friday. Recent data from the economy has been lukewarm while corporate earnings were healthy. Would the economy improve as corporations spend their cash hordes to invest in new businesses and hire more employees or would they use their cash to buy other companies through M&A.? What are the implications for the financial markets?
 

Markets in the US do not seem to know which way to turn.

We have an interesting situation where companies in general have figured out a way to make more money with less while the the average Joe has a hard time making ends meet or finding a job.

Would it last? in other words, for how long can companies continue growing profits while the average Joe has a hard time? 2 quarters? 6 months? A year? A few years?

Can US companies continue to do well in light of poor economic conditions in the US? What role does globalization play in this situation?

"Sell in May and go away" is an axiom that is often repeated in Wall Street. What are the chances it will ring true this year? Why did Wall Street come up with such an axiom?

What is our take on it? Please let us know.