Market Update: Get Your Cash Ready!
Posted by Frugal on August 15th, 2006
As you are aware of, I don’t send out alerts that much at all on stock market in general. The reason is that I’m more of an investor than trader. In the past, my record has been that I’m far more accurate in calling short term bottom than short term top. Most of the time I BUY to invest. When my stocks fall 20%, I wont’ even blink my eyes. I’m really a long term investor.
It looks to me that the big rally is coming possibly early. I have been expecting markets to fall towards September 1st, the date for the short term bottom for 4-year election cycle. Due to today’s good news in CPI core rate (falling!? you got to be kidding!), market is reducing the chance of rate hike in the September meeting. If the trading volume keeps increasing, there will be a very good chance of a Xmas rally.
Especially with NASDAQ leading the market rally, it’s a very good sign. If you don’t have ANY things in this market, you should put your cash in maybe now. I think definitely one should get fully allocated into the stock market by mid-September. You can average your money in from now till then.
GET YOUR CASH READY! AND GET YOUR STOCKS! Buying market indexes or sector indexes should be good enough. By the way, I’m not buying yet. I will wait for S&P 500 to break 1280 first, and then pull back. Don’t use up your “bullets” either. The curse of 4-year election cycle may be worse than you think.
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August 15th, 2006 at 2:26 pm
Does it still go for the GE stock that I was going to by in september like you said? I stopped from buying now and have CASH like you say…
I am waiting for it to go down but havne’t seen it yet.. All I seen it go up 1.16% from yesterday
August 15th, 2006 at 3:39 pm
Garrett,
I cannot make personal recommendation, because I don’t want you to get mad at me when I’m wrong (obvious that happens to all investors, and quite often I must say). Most of the time I would prefer to use indexed mutual funds or ETF such as SPY, DIA, QQQQ, or sector ETF like SMH, PPH, etc.
I can tell you exactly what I’m doing on this site (when I do buy stocks), and you can decide for yourself.
If you don’t have any stock, I will recommend you to put in some 30% to 50% of your money into stock market now, and save the rest for wait-and-see.
For disclosure purpose, I personally hold some shares of GE (bought by my money manager), but that amount is tiny compared to my entire portfolio. I haven’t got any stock quote for GE for maybe 4 months. I’m not paying much attention because the amount is too small.
I think GE is an okay stock. Personally, I would take greater risk in buying a more speculative index or sector right now to take advantage of a possible up-swing. But remember to sell it when it reaches the height. I will probably be selling early next year.
I think there are probably better choices than GE. And if you use indexes, it will be safer.
Good luck investing.
August 16th, 2006 at 10:27 pm
Shifted my retirement funds! Been wanting to do it for awhile now…