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

Smart Money with Keith Springer Newsletter-Markets Dance As Bernanke “Makes It Rain”

Markets Dance As Bernanke “Makes it Rain”

Written by Keith Springer 5.16.13 BernankErAIN

Stocks continue to inch higher as investors remain stumped. This is the most hated rally in my 29 years of managing money. Nothing in the economy supports these new highs, except of course one thing: Ben Bernanke is “making it rain” (and so are his good friends at the European Central Bank (ECB) and the Japanese central bank (JCB) ). As I said last week, Ben is afraid of being lonely, and “You don’t fight the Fed chairman.”

Most investors feel the Fed will eventually have to quit printing money because they are creating hyper-inflation. The reality is that we are in a negative inflationary, otherwise known as a deflationary environment. Yesterday’s economic reports were eye-opening for many on Wall Street, although certainly not for readers of this newsletter. Factory output, manufacturing production, and industrial capacity utilization, all dropped like a rock as global demand is waning.

The alarming report came from the  Producer Price Index (PPI) , that shows the inflation level, which came in a massively surprising negative .7%. This was the largest decline in wholesale prices in almost 4 years. Clearly all of the global stimulus measures can’t stand up to the massive demographic headwind faced by the entire developed world, which I explain in Facing Goliath – How to Triumph in the Dangerous Market Ahead.

Although this is harrowing news for the economy, as a whole, it is good news for investors. How can this be, you may ask? Well, said the blind man as he picked up his hammer and saw, this data gives the Federal Reserve incredible leeway to keep stimulating the economy with an easy monetary policy. Or in other words, the world’s central banks are making it rain.

My fear continues to be the end of Quantative easing, which does not appear in the cards anytime soon. With global demand waning, and deflation not inflation the fear, money will continue flow and stocks will benefit. This will continue to be the most unloved rally in history, at least for a while. However, when we start to see overwhelming investor pessimism turn to optimism, that will be the signal to run for the hills.

Investor Strategy

With the commitment by global banks to continue the money printing, and with cash and CD’s giving a negative return after inflation, investors have to be invested. The “sell in May and walk away” correction was far too expected this year, and has likely been pushed off until later in the summer. The market does not crash when everybody expects it to. Investors should be invested, but very selectively, looking to get decent returns based on your personal needs, and ignoring the averages. Invest for need and not for greed™ has never been more apropos. When this market corrects and/or the rally ends, it’s going to be very ugly and you do not want to be in the wrong place or doing it yourself.

The key is to be properly invested in a portfolio that is designed to get the best returns with the least risk possible, as the Springer investment approach is designed to do by managing risk and delivering returns in any market.

…… and that’s where we can help. To learn more about our powerful proprietary Investment Management Strategy and/or get a free second opinion on your portfolio, simply reply to this email, or give me a call for a no-cost no-obligation consultation today at (916) 925-8900.




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.