Written by Keith Springer | 2.21.13
My prophecy that the stock market would fall in advance of the sequester debate is coming true. With the Sequester just days away, you can feel the heat of all the rhetoric from both sides, and you can bet it’s going to get to the boiling point before it gets resolved. Not since the North vs. the South, the Hatfield’s vs. the McCoy’s and/or even possibly almost as bad as the Red Sox Vs. the Yankees (The Yankees are the bad guys), has our nation been so torn apart.
Both Democrats and Republicans are pounding the table, warning of consequences so dire that the earth will stop spinning on its axis and hurdle helplessly through space. In a funny way they’re right. The sequester was supposed to be too ridiculous that no “sane politician” could let that happen. I guess we forget that is an oxymoron. Although I am confident that they will come to a conclusion, I am not willing to bet the farm (or my nest egg) on it. They will most likely come to terms only after they have scared the wits out of every American. Every investor should heed the message from my special letter to clients.
To make matters worse, Ben Bernanke and the Federal Reserve released minutes from their most recent meeting where they discussed slowing or stopping the buying of bonds sooner than what many expected. This is NOT good news to a stock market absolutely addicted to stimulus. However this will not be solidified for several months, so this ties in well with my forecast that things could get ugly until a deal is reached, and then a resumption of the rally. If the Fed does decide to slow asset purchases, it could be the catalyst for a more severe correction that we are long overdue for, one that will cause severe pain to those who have not properly safeguarded their portfolios.
Even though the market is near the old highs, now is not the time for complacency, for it is exactly that when markets fall. Take this time of relative calm to put a plan in place or review your current investment and retirement plan. Get a 2nd opinion, and make sure it is built the way you need it to be, “Invest for need, not for greed™”. If you are looking to get the best returns with the least risk possible you may want to view our powerful Investment Management Strategy which applies our structured and disciplined, tactically managed approach to managing assets for our clients, by managing risk and delivering returns in any market. Unlike any buy and hold scheme, mutual fund program, or many other money managers, we utilize an active style to managing our client’s assets with a hands-on, “tactical” approach, that can change quickly between strategies, and go to cash during dangerous times. I have been managing money for over 29 years, and it works.
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.