First fall is not as ugly (yet)
Posted by Frugal on June 23rd, 2009
With Monday drop in the stock markets, sentiments have temporarily turned. I think before the first week of July, stocks may be still in the “levitation” stage, meaning that a big drop won’t come yet. Plus that today and tomorrow, Fed will come out and swing again. We are sure to see some more volatility. Unfortunately, the only thing htat I’m more certain is that it may be a short-term downside on gold. Fed is losing its credibility. Whatever Ben says may backfire now, posing risks to further bond yield rise, or US dollar fall. If US dollar falls (which is less likely in the short term), then we can party on.
I have previously stated on my blog that I believed a decline will come by July/August timeframe (please post the link if you find it sometime back in April/May. I’m really too busy to blog these days). Currently, I’m still not sure if the current decline will turn out to be the retest of the low. It is still possible for stock markets to decline moderately towards late July, and rally back up in August to establish a lower high on the chart. In any case, it seems to be fairly certain that the high of 2009 AND 2010 AND 2011 is behind us. There may be a very brief year-end rally in December timeframe, but I seriously doubt that brief rally can exceed the last high. And the financial crisis will probably replay with a even bigger magnitude either second half of this year, or in 2010. In any case, I’m also certain that Bernanke won’t have his current job in 2011.
It is my opinion that one should divest everything correlated to the general economy and go to cash.
For the aggressive traders, they can look for establishing short positions.
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June 24th, 2009 at 1:41 am
Frugal,
Regarding gold – did you see that the IMF is looking to sell their holdings to raise some cash? I believe gold will go lower and that will be a good time to buy.
-Mike
June 24th, 2009 at 1:42 am
Frugal,
Regarding gold – did you see that the IMF is looking to sell their holdings to raise some cash? I believe gold will go lower and that will be a good time to buy.
-Mike
June 24th, 2009 at 12:35 pm
I sold my miners 3 weeks ago.. glad…
I agree with you, I think that there are chances that a bubble in asian market can be formed and gold will be a good buy as well, what do you think?
June 25th, 2009 at 12:44 pm
“but I seriously doubt that brief rally can exceed the last high….”
Never underestimate the power of market manipulation or programmed trading. Not recommending that anyone get into this market, which has been highly manipulated to the benefit of insiders,….just sayin’.
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July 5th, 2009 at 10:50 am
Frugal – You spend too much of your time trying to trade the markets. Your viewership would increase, if you blogged about what you know i.e. engineering, and not trying to persuade us about your market savvy.
You’re also right, that your $120K salary is on the low end, esp since you didn’t get a bonus. I made double that at 24-25 years old.
You shouldn’t mislead people about your $1million either. $1 million, is $1million in the bank, and not adding your home equity, your 401k, your employee stock options etc. Get real here.
July 6th, 2009 at 6:59 am
Frugal,
If you’d ever plan a big party event you know how much work that is. So you’re more understanding when you see someone not doing a good a job and you give people a little more credit. In Bulldog Gin’s comment to you, I don’t see the understanding and thus the showing the lack of experience. I also don’t see it adding value to your blog and it doesn’t really show that this person has much knowledge about the market. This person doesn’t know the first thing about asset allocation, when he expects a person to allocation 1 millions dollars in the bank. It’s always easier to complain then to contribute. You’re doing fine, just keep improving your website.
July 6th, 2009 at 7:47 am
Bulldog has a point that one of the functional definitions of a millionaire is someone who has $1 million in cash or can put that into any investment at anytime. It is a million dollars liquid. Conservatively real estate should be taken out of the mix as should 401k’s although in looser lending times you can borrow off each of these vehicles. Stock options aren’t cash in hand and should not factor into the mix if you are being conservative, again.
I like Frugal’s topics though- keep them coming.
-Mike
July 23rd, 2009 at 9:15 am
the stock market is going higher at least in the short term
July 23rd, 2009 at 9:15 am
the stock market is going higher at least in the short term
July 23rd, 2009 at 9:15 am
the stock market is going higher at least in the short term
August 10th, 2009 at 10:37 am
As Buffett has said, “cash is trash.” In 1971 the US went off the gold standard and since then, US currency has lost 80% of its value. Our currency is being seen for what it is, worthless paper which is being inflated on a massive scale by huge government spending.
Why in the world would anyone “divest and go into cash”???
September 3rd, 2009 at 8:58 pm
I see you are not answering my question. That must mean I was right.