We are co-hosting a free seminar with internationally renowned trust attorney John Goralka.

When: Thursday, March 8th, 2012 at 6:00 p.m.

Where: The office of John Goralka. 4470 Duckhorn Drive, Sacramento, CA 95834.

Part 1: Estate Planning and Asset Protection in 2012

Part 2: How to avoid the 7 deadly sins of retirement. Plus, the current
state of the economy and the stock market, and how to position your portfolio for the next 12-24 months.

*Seating is very limited so reserve your spot immediately by emailing Cathy@keithspringer.com or calling 916-925-8900.

Keith Springer, radio host of Smart Money with Keith Springer and president of Springer Financial Advisors appears live on Fox Business to discuss where to put your money now and if the market can crash post-election.

Keith makes his market predictions for the year to come, and how to make smart investments before the market makes a correction.

-Ben warns even as things look better

Just when things start to look up, Ben Bernanke gives us a little slap of reality, warning that things don’t look so rosy down the pike and a little tickle in the form of a probable QE3 to soothe our souls.

The markets have responded to the impressive string of better than expected economic news over the last few months. It’s hard to believe that all that many could think that it was truly the end of the great recession, (I know it officially ended long ago but it doesn’t feel like it!) but it gave hope that perhaps at the very least a firm recovery was underway. Bernanke’s warning and subsequent continuance of QE Mini-Me simply confirms the case I have been making that the economic strength was simply the last vestiges of QE2 and without further stimulus, the economy would again turn south.

To my surprise however, Bernanke and the Federal Reserve Board laid out the groundwork for further stimulus now, before things got bad again, rather than being reactionary. To that I give him credit because the latter would have come too late, as there would have been too much lag between the end of QE2 and when we would start feeling the effects of a QE3 which is typically 9 months later. They are going to keep interest rates at nil for an elephants lifetime they announced, and if inflation is below their target rate of 2% when the slowdown starts, they will begin a new round of asset buying or an official QE3… which I would bet my Superbowl winnings on, had my team not broken my heart.

Now, I know you may think there’s much more inflation out there, but in reality we are actually battling “deflation”. Take a look at a recent Bloomberg article:

Huggies Price Cut Shows Why Bond Market Backs Bernanke QE3
Feb. 6 — Procter & Gamble Co.’s failure to raise the price of Cascade dishwashing soap shows why investors are buying Treasuries at the lowest yields in history, giving the Federal Reserve more scope to boost the economy. The world’s largest consumer-products company rolled back prices after an 8 percent increase lost the firm 7 percentage points of market share. Kimberly-Clark Corp. started offering coupons on Huggies after resistance to the diapers’ cost.

Let’s face it, with interest rates so low the Fed is going to keep borrowing for Quantitative Easing programs until the cows come home… which is essentially when the bond market stops allowing them to… and they are going to have to for a long time. The demographic overhang of 92 million baby boomers past their peak spending years, the massive over-indebtedness of the American consumer just screaming to deleverage and a powder keg in Europe set to explode in a matter of months is a Gail force headwind that will take years to overcome. If you are interested in learning more about these issues and more affecting our economy, be sure to pick up a copy of Facing Goliath: How to Triumph in the Dangerous Market Ahead, it is written in plain English and is easy to understand, a must read for every investor.

Regardless of the slowing economy, or even a European implosion led by Greece, a full blown QE3 will push the markets higher. Although, stocks are seriously due for a correction, a pullback probably won’t come until the market is much higher because so many people have been left behind and are just waiting for a chance to get back in. More importantly, the continuation of the rally would simply be an extension of the aging bull market and not the beginning of a new one.

In the bigger picture, the market will not likely top until the average investor, who remains unenthused, throws caution to the wind and decides to get back in. Therefore, investors must avoid complacency and remain alert for signs of a top, as this rally in our old bull market will likely be measured in weeks or months and not years. Even if you think that it won’t happen until after the election… are you willing to bet your family’s financial security on it? I’m not!

Investor Strategy
Although, you may have the feeling of being left behind or the urge to try to time the market, we continue to urge our clients to simply, Invest for Need, Not for Greed. That is merely the art of getting the very best returns you need in order to succeed, with the least risk possible.

Nimble traders can take advantage of this rally, but the key is to be “Tactical” and avoid buy-and-hold (buy-and-hope) at all costs. Moderate and low risk investors, us average folk who would rather not have to work until the day we die, or lose sleep at night because of market volatility, should continue to focus on the market’s “sweet spot” which is currently income investments such as corporate bonds, preferreds and MLP’s, many yielding 8-10%. If the market does continue to rise, you’ll likely get the best of both worlds of appreciation along with a healthy dividend, but with less risk.

For those that want a guarantee of principle with a decent yield or a guaranteed income for life, there are many attractive annuities out there… several that have upside potential based on the market but with no risk of loss. If your portfolio can live with this option, take advantage of it. Why lose sleep the next time the market crashes.

…And that’s where we can help. Our active, hands-on Top-Down Tactical™ investment management strategy for managing portfolios can help you manage risk and deliver returns. If you would like to discuss the market, economy or simply get a free second opinion on your portfolio, call me for a free consultation today at (916) 925-8900.

-The market loves that wall of worry

Who woulda thunk it. The market is steam rolling forward against all odds climbing that wall of worry. Few thought it was possible, which of course is why it’s happening.

Investors have created this expectation that all of the world’s ills simply must bring the market down. The powder keg of Europe, the high unemployment in the US and the seemingly inevitable hard landing for China to name just a few, would be just too much to bare. However the market likes to surprise the most investors possible at any given time living up to the axiom, “if it’s obvious, it’s obviously wrong”!

Now let’s be clear. The major headwinds of the enormous debt crises in the developed world will certainly bring the market to its knees eventually. After all, the immensely over-indebtedness of Euroland and America along with the major demographic obstacle of a rapidly aging population well past their peak spending years, will without a doubt create a massive deleveraging and slowing economy. This is well chronicled in Facing Goliath: How to Triumph in the Dangerous Market Ahead, a must read for any and all who hopes to retire in the next 5-10 years or is already in their golden years and wants to protect and grow their families nest egg. Yet, the facts are the facts: stocks are rising and “the trend is your friend”.

The main reason is simple: Bernanke and the Federal Reserve essentially initiated QE3 last week with its announcement that they were going to leave rates low into eternity, basically continuing QE Mini-Me. In addition, The Fed also set a core inflation target of 2% which gives them the right to start buying bonds again if inflation goes below that, which is likely in the months ahead. Intuitional investors smell a QE3 like great white sharks smell blood. Of all the supposed indicators, the one that seems to hold true the most is “you don’t fight the Fed”.

Although many investors may wonder whether this primary uptrend is part of a new bull market, evidence suggests it is simply an extension of the bull market that began in ’09. The difference is significant as a new bull market would have years to run while the bull market from the Mar. ’09 low is almost 3 years old and clearly aged. This being the case, investors must avoid complacency and remain alert for signs of a top, as a rally in an old bull market would more likely be measured in weeks or months and not years. Certainly the administration is hoping that it outlast the election….but I wouldn’t bet the farm on it.

Investor Strategy
The market is definitely due for a pullback, but so many people have been waiting for one that it might not come until the market is much higher. Nimble traders can take advantage of this rally, but the key is to be “Tactical” and avoid buy-and-hold (buy-and-hope) at all costs. Moderate and low risk investors should continue to focus on the market’s “sweet spot” which holds the most value such as income investments. If you can get 8-10% yields on corporate bonds, preferreds and MLP’s, why in the world would you take all the risk of the stock market. Invest for need, not for greed!

…And that’s where we can help. Our active, hands-on Top-Down Tactical™ investment management strategy for managing portfolios can help you manage risk and deliver returns. If you would like to discuss the market, economy or simply get a free second opinion on your portfolio, call me for a free consultation today at (916) 925-8900.

-New highs likely after post earnings blues

El Niño has been bringing tepid temperatures and creating a beautifully warmer winter to most of the nation this year, and it’s spilling over to the stock market. Just as the majority of Americans braced for the harshness of winter this year, most investors were expecting the bear market to again rear its ugly head. In reality, neither makes any sense. Winter is as usual winter, but the stock market is fighting an uphill battle and a slew of bad news. Well regardless of the reason, I for one am thrilled to have both even though we all know both are temporary. I understand we need the rain, but hey, I moved to California 22 years ago for the sunshine.

For the immediate future however, investors should be prepared for a pullback once earnings season is over, the post earnings blues. We have had a trend for the last several years whereby the market has sold off just before earnings releases due to expected negative surprises, rallied during earnings as they have consistently beat expectations and sold after afterwards… and that’s where we are right now.

However, the resilience of the market mixed in with a few positive factors should provide further strength for stocks.

• The market is enjoying a respite to the European mess and is focusing on the recent better than expected economic news.

• The January barometer, which implies that a good early January is often good for the stock market, has been strong and is discussed in All’s Well That Begins Well.

• It is an election year and the typical election year gain for the S&P 500 Index since 1949 is +6.1%.

• The last three times there was an incumbent Democrat in the White House running for re-election (Bill Clinton in 1966, Jimmy Carter in 1980, and Lyndon Johnson in 1964) the market made double digit gains of +20.3%, +25.8% and +13%, respectively.

• Bernanke and the Federal Reserve Board toss us a QE3, which is likely once QE2 wears off in the next few months.

Long shots for a new bull market:

• Every bear market is followed by a bull market. Some believe the world and most US indexes went through a bear market in 2011, leaving us at the start of a new bull market. The average bull market move in a secular bear market is +70% over thirty two months. The weakest bull advance was +48% and the shortest bull were twenty four months. Currently, the new bull market here is just three and a half months old and only up +17%.

• From a contrarian view point, stock valuations reflect a lot of pessimism. Looking at money flows, one would say that the pessimism is excessive: currently over 8 trillion dollars are in money market and federally insured short term accounts at banks, yielding almost nothing in returns. However, I have been hearing the argument that there is an enormous amount of cash sitting around for my entire 27 years career in wealth management.

Now, keep in mind one very important lesson on investing: things work until they don’t… and although all of the above can give you a sense of security to be in stocks, none of them are exactly based on firm, fundamental, or technical research. We must all be aware that the above mentioned will prove irrelevant in a matter of seconds when (not if) any of the major potential crisis erupt such as:

• Greek and/or other Euro defaults or even potential defaults.

• Another slowdown in the US economy, which is likely once the effects of QE2 have passed and slower consumer spending as all of the baby boomers will pass 50 years old by year end.

• A recession in Europe.

• Negative earnings surprises and earnings due to a continued sluggish US and European economy.

• Congressional gridlock (Time to vote no incumbents).

All of this and more is well documented in Facing Goliath: How to Triumph in the Dangerous Market Ahead a must read for anybody that is retired or hopes to retire in the next 5-10 years and wants to protect and grow their families nest egg.

All of this said I still believe El Niño will return to the market once we get through the post earnings blues, but with yields so high on income and dividend stocks, I do not believe the risk is worth it. With yields of 8-10% available out there if you know where to look, why take on all the risk. Ignore the hype when the market is rising and focus on what your portfolio “needs” and take the least amount of risk possible to get there.

Everybody wants to be in stocks when they are rising, but nobody wants to be in them when they are falling, and you can’t have it both ways. Nobody can time the market. Investor wasteland is littered with those that have tried and there are many famed investors in that category. In the last year, we have had a number of legendary hedge fund managers such as Stanley Druckenmiller, George Soros and Javier Guerra all call it quits, saying this is the toughest market they have ever been in. Perhaps John Paulsen should be listening. Just a couple of years ago he was considered the best manager on the planet. In 2011, he lost 52%!

…And that’s where we can help. Our active, hands-on Top-Down Tactical™ investment management strategy for managing portfolios can help you manage risk and deliver returns. If you would like to discuss the market, economy or simply get a free second opinion on your portfolio, call me for a free consultation today at (916) 925-8900.

Regards -Keith Springer

Keith Springer helps local families in the Sacramento area this holiday season with his 13th annual Springer Turkey Challenge.

The 2011 Springer Turkey Challenge feed over 10,000 people in need in the Sacramento region this holiday season. This has been one of the most successful years. The proceeds went to the Sacramento Food Bank, River Oak Center for Children, the Stanford Settlement and the Make-A-Wish Foundation of Sacramento.

For more information on how you can help the Springer Turkey Challenge visit the website http://www.SpringerTurkeyChallenge.com

We are once again hosting our FREE award-winning dinner seminar next week. This seminar will educate you on how to create a secure retirement for you and your family. Dinner is complimentary, there is no charge to attend and no products will be sold.

We will also be discussing the current state of the economy and the stock market, and how to position your portfolio for the next 12-24 months.

Hosted by: Keith Springer

A complimentary dinner immediately follows.
Please select the session that best fits your schedule:

Dinner               Dinner                   Dinner

Tuesday              Wednesday            Thursday

Jan. 24, 2012        Jan 25, 2012        Jan 26, 2012

6:30 PM               6:30 PM                  6:30 PM

Location: Scott’s Seafood, Folsom 

9611 Greenback Ln,
Folsom, CA 95630

Space is limited: RSVP to Cathy at 916.925.8900

These will fill, so call immediately to RSVP (required).

-January barometer is a good omen

In this issue:

1. January barometer
2. What the S&P Euro downgrades mean
3. Investor Strategies for a topsy-turvy world

The January Barometer suggests that when the market rallies in January, then the entire year should show a gain. The so called Barometer also includes an early warning system that suggests the first five days of trading indicate the direction of the market for the year. According to the Stock Trader’s Almanac, this early warning system has been accurate thirty-three times over the past thirty-eight years, an 86.8% success record.

All the major indexes showed gains in the first five trading days, ranging from 1.43% on the Dow to 2.74% for the NASDAQ Comp. It gets even better when the first five day indicator comes in an election year, which has a 13-2 record. Although in this era of unprecedented government intervention, extraordinary volatility and voodoo economics, investors should be as conservative as possible and take the least amount of risk possible to get the returns they need.

Never before has the market cheered more for worse economic numbers, all for one reason… more stimulus (absolutely sickening). Eventually however, the free ride and deficit spending will have to stop. At that point we will get to see a great game of musical chairs on the deck of the Titanic. I intend to be on shore by then. I hope you’ll be joining me.

The S&P downgrade of nine European nations last Friday simply shows us that the problems are far from over, and is more fully explained in Taking Out The Euro-Trash edition. In simple terms, there are three main problems in Europe:

1. The first is that most of the banks are insolvent. They were allowed to leverage their balance sheets 30-40 times their capital invested, most of it in other nation’s debt (sovereign debt) which was supposed to be unshakable.

2. The second problem is that this sovereign debt is anything but unshakable. Many countries are going to have trouble paying their debt and the massive unfunded liabilities, and it’s just going to get worse. Banks will eventually have to mark down the debt to what its real value is. This is what happened here in 2008, ultimately destroying Lehman Brothers, Merrill Lynch, Bear Stearns (Do I need to keep going, it hurts). When this happens, many will go bankrupt making 2008 look like a puppet show.

3. Print money, raise taxes and/or cut spending: that’s all the choices there are folks and none are going to be fun.

Central Banks, Bernanke and company at the Federal Reserve included, know that countries cannot function normally without viable banking systems, which is why so much effort has been made towards them. This is what the Occupy Wall Street crowd is so angered about. Point blank, if banks can’t make loans, then businesses can’t operate and need to cut back, translating into fewer jobs, less consumer demand and lower output, which quickly becomes an ugly spiral.

Unfortunately, this all comes on top of an already massively over-leveraged and rapidly aging population which naturally spends less as it gets older. The government can stimulate all it wants to offset this, but it eventually catches up to you. Debt eventually has to be paid back… imagine that. All of these issues discussed above as well as what investors need to do about it, are fully discussed in Facing Goliath: How to Triumph in the Dangerous Market Ahead, a must read for every investor.

Investor Strategies for a Topsy-Turvy World
Obviously, nobody should be sitting in cash awaiting the end of the world and earning nothing on their money. These issues might take years more to reach a boiling point or not at all. On the other hand, things could hit the fan tomorrow, so investors should simply take advantage of what is available but have a plan in mind. At the moment, things don’t look too bad out there between recent positive economic surprises, the January Barometer and the cycles, but things change quickly.

The economic strength we are witnessing is most likely the effects of the QE (Quantitative Easing) programs. Government stimulus takes 6-9 months to feel and lasts for about 6-9 months. Therefore, things may appear deceivingly good for a few months before they get bad again, as QE2 will run out in the end of the first or middle of the 2nd quarter.

There are plenty of places to make money in this market if you know where to look. While some nimble traders might attempt to time the short-term swings in the market, we prefer to remain alert to the primary trend and focus on investments that get the best returns with the least risk possible for our clients. Yields of 8-10% are available, so why take all the risk if you don’t need to. Keep in mind the mantra I reiterate on the radio every week – Invest for need, not for greed.

…And that’s where we can help. Our active, hands-on Top-Down Tactical™ investment management strategy for managing portfolios can help you manage risk and deliver returns. If you would like to discuss the market, economy or simply get a free second opinion on your portfolio, call me for a free consultation today at (916) 925-8900.

Regards -Keith Springer

P.S. Be sure to listen to last week’s Smart Money with special guest Harry S. Dent. It was a doozy!

3 things to watch:
1. Jobless claims up again
2. Retail sales slump
3. Is QE3 preparations underway

Well it’s the same old story…we get one step up on some good news only to beaten back two. The jobless numbers clearly show that much of the pre-holiday hiring was just temporary, most likely from delivery drivers bringing Christmas goodies from Amazon to all the boys and girls around the world. The disappointing retail sales increase on .1% simply confirms that there is no true consumer demand in the economy and that Americans just like to buy things for the holidays.

Either way you look at it, the economy is likely to slow in the coming months as the effects of QE2 start to wear off. The slowdown along with the waning of inflation will give Bernanke and the Fed a license to institute QE3. In fact, it is this hope that the market has been hanging it’s hat on, as without it we will continue to slog through the mud.

Market Update: Short term, the market has had a good beginning to its happy ending, but looks overbought here. Many fund managers ended the year with a lot of cash and are playing catch up. A pullback could end that buying spree. Look for flat to sown market until we get some positive earnings surprises…in either direction. If earnings come in worse than expected in general, this rally is over barring a QE3 of course.

Regards -Keith Springer

Keith Springer, Financial Advisor in Sacramento CA and author of Facing Goliath discusses predictions for the markets in 2012, and how to invest in a bear market live on Fox Business Network with Charles Payne.