Smart Money with Keith Springer Saturdays at 1PM and Sundays at 6AM on NewsRadio KFBK 93.1 FM and 1530 AM

It’s Not All Bad Out There

-Bad feelings may bring good tidings

Investor sentiment about economy and the market is eerily reminiscent of those evil days of 2008. Even Johnny Carson’s Carnac the Magnificent would be having trouble reading this economy. No one feels good about what’s going on right now, and between the Euro crisis, our stagnant economy with rising unemployment, the rising deficit and the Bozo’s in Washington (our beloved politicians of both parties) who are completely disconnected from their constituents, who could blame them. It reminds me of what I wrote just days before the bottom in March of 2009: “There is a meteor hurtling towards earth and it’s just seconds from impact… we have to be close to the bottom, if even only temporarily.”

Although sentiment is nowhere near as pessimistic as it was then, it is pervasive enough to be setting us up for positive surprise. There are certainly plenty of negatives out there, including the last statement by Ben Bernanke and the Federal Reserve – “We are still years away from a complete recovery and there is significant downside risk to the economic outlook including strains in global financial markets”, which is even enough to scare the bejeesus out of Winnie the Pooh.

Yet, there are also several positives. The continued easing programs, such as QE Mini-Me, will continue to provide substantial liquidity and will likely keep us out of another full-blown recession… even if it feels like one! However, several reports, such as the continued increases of the Leading Economic indicators, better than expected retail sales, yesterday’s report that the demand for capital goods increased more than predicted and today’s GDP and jobless claims aren’t great but are encouraging.

Let us not forget that 3rd quarter earnings will start to be released soon, and the combination of overwhelming pessimism along with the trend of repeated positive earnings surprises could very well be setting us up for a pretty good 4th quarter. After all, it’s earnings that moves stock prices, and if earnings are good, even if the economy is bad, prices will rise. However, it could get ugly until earnings season begins, and I would not be surprised to see a breach of the August 9th lows.

That is not to say that the headwinds I discuss in Facing Goliath: How to Triumph is the Dangerous Market Ahead are gone… no way. But a reprieve could be upon us. We just have to be sure not to get caught up with a false sense of security and stand ready with our portfolio exit strategy. There will definitely be a time in the near future to be in cash. The question is can the administration keep it together until after the election.

Investor Strategy:
Investors need to be careful here and avoid the “all in or all out mentality” of investing in the market as a whole. If you’re not investing for dividends and income, you are just gambling. Stick to investing in the sweet spot which continues to be income stocks and select corporate and tax-free bonds. The current volatility has brought bond prices down and they are a tremendous value right now with 8-10% (and higher) yields and appreciation potential.

I have been professionally managing money for 27 years and these times are as tough as they come right now, it is imperative to be the expert or hire somebody that really knows what’s going on and what they are doing… and that’s where I can help. Our active hands-on approach to managing portfolios can help you manage risk and deliver returns. Call me for a free consultation today at (916) 925-8900.

Regards -Keith Springer

P.S. Don’t forget to tune in to my new radio show Smart Money, this and every Sunday at 4pm on Talk650KSTE.

Springer Financial Advisors ("Advisor") is a federally registered investment adviser located in Sacramento, California. Advisor and its representatives are in compliance with the current filing requirements imposed upon registered investment advisers by the Securities and Exchange Commission and the State of California. Advisor's web site and its emails of general distribution are limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of Advisor's web site on the Internet or dissemination of informational emails should not be construed by any consumer and/or prospective client as Advisor's solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. A copy of Advisor's current written disclosure statement discussing Advisor's business operations, services, and fees is available from Advisor upon written request. You may also obtain publicly available information about Advisor through the SEC website as follows: Advisor does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Advisor's web site or incorporated in an email, and takes no responsibility therefore. All such information is believed to be reliable and authoritative but does not constitute sufficient information to be the sole basis for sound investment decisions and all users thereof should be guided accordingly. Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended or undertaken by Advisor) made reference to directly or indirectly by Advisor in its web site, email, or indirectly via a link to an unaffiliated third party web site, will be profitable or equal the corresponding indicated performance level(s). Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client or prospective client's investment portfolio. Certain portions of Advisor's web site (i.e. articles, commentaries, etc.) may contain a discussion of, and/or provide access to, Advisor's (and those of other investment and non-investment professionals) positions and/or recommendations as of a specific prior date. Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendation(s). Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from Advisor, or from any other investment professional. The information is of a general nature and should not be applied indiscriminately to particular situations wherein it may not be completely applicable. Advisor is neither an attorney nor an accountant, and no portion of the content should be interpreted as legal, accounting or tax advice.