Goldilocks Would Love This Place- Free money and not too hot, not too cold economy keeps the bears away

Goldilocks Would Love This Pace 
- Free money and not too hot, not too cold, economy keeps the bears away
Keith Springer

If you’re an investor, these aren’t bad times, assuming you can put aside your fears of what the future holds that is. The not too hot, not too cold economy has been making it the best of both worlds for the financial markets and an awfully fine hiding place for Goldilocks. The economy has been decent enough to keep us out of another recession, but not too strong as to prevent Ben Bernanke and his Federal Reserve Board puppeteers from printing more money and injecting it into the economy calling it stimulus, QE Buzzlightyear, or whatever suits their fancy.

The Fed’s QE3 should push the major selloff that most investors fear, and that I am convinced will occur, until next year. The Fed’s aggressive move has raised the floor below the market. I understand that many of my readers of this newsletter and Facing Goliath – How to Triumph in the Dangerous Market Ahead are convinced that a crash is inevitable any day now. Given the economic conditions, who could blame them? The world looks like a mess. Hell, the world is a mess!

However, markets simply do not crash when everyone expects them to. There are no exceptions. On a recent CNBC appearance, I outlined the 5 reasons why the market should stay relatively strong, albeit with normal corrections, through the end of the year.

  1. The world is awash in liquidity – World banks are printing money like its going out of style. China is next.
  2. Earnings will be better than expected – this has been the norm for the last 4 years. Stocks are flat to down ahead of earnings season anticipating bad earnings and then they are better than expected. Although, even if they are better than expected, we are finally getting earning downgrades which signifies the end of the cycle.
  3. Negativity is omnipresent – stocks do not drop when everyone thinks they will.
  4. People are still afraid of stocks – not until a correction can hurt the most people, will it occur. Stock and bond flows are ridiculous. So far this year bond funds have received over $1 trillion while $500 billion has left stock funds.
  5. You don’t fight the Fed -Where else do you go? The Fed has forced people to take risk, even if they shouldn’t, to help perpetuate the wealth effect”.

However, as we enter the new year all bets are off. I expect the markets will likely peak in the first half of next year and start a cyclical bear market. Even with all of the above conditions in place, even trees don’t grow to the sky. Although, I would not be surprised to see complacency set in, in advance, which would change the story. That is not so far off, so prepare your finances now! Be in the right investments for your own individual objectives, what we like to call “Invest for need, not for greed™”, and have your personal exit strategy at the ready because it will happen at light speed…..again. And that’s where we can help. Our “Invest for need, not for greed™” approach combined with our hands-on proprietary Top-Down Tactical™ investment management strategy can help you manage risk and deliver returns. If you would like to learn more and/or get a free second opinion on your portfolio, simply reply to this email, click our Appointment Request Form or call for a no-cost no-obligation consultation today at (916) 925-8900.

 

 

 

 

 

 

 

 

 

 

 

Keith Springer

About Keith Springer

Keith Springer is FOX40's Financial Analyst , author of "Facing Goliath: How to Triumph in the Dangerous Market Ahead", radio host of "Smart Money with Keith Springer" on 1530 KFBK, editor of "Smart Money Newsletter", a financial planner, a market technician, a financial writer, multinational philanthropist, founder of Top Down Tactical™ and President and founder of Springer Financial Advisors in Sacramento CA, an SEC Registered Investment Advisory Firm. He has developed a proprietary process for successfully building tax-efficient and retirement portfolios and has been providing specialty wealth management services for over 27 years. He can be reached at 916-925-8900 or Keith@KeithSpringer.com.
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