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Precious Metal Prices Dip

The DOW didn’t start the week with a bang, but it picked up speed as the day went on. The DOW finished up today 109 points from it’s Friday close. Late in the day it was up over 150 points. The S&P 500 finished up 11 points which means the two indices are up today by nine tenths of a percent. The best of the big indices is the NASDAQ, finishing up 35 point (1.33%). The rally in the markets today was due to Europe’s announcement of optimistic look on Greece’s debt. Even though the gain was welcomed by many on Wall Street, the strength of the markets may only be temporary. Yes the dollar has gained strength, but lost some steam with the dollar index closing at $75.33 today. The Euro gained 0.6% against the dollar. If the Federal Reserve keeps printing money, it will lose even more of what it recently gained.

In the commodity sector, precious metal prices fall. Gold dips below the $1500 level, settling at $1496.40 per oz. and the price of silver also slipped back a bit to close at $33.59. It seems that many countries are lowering their concerns about inflation. The Chinese Premier Wen said the country’s inflation would be below 5%. With views like that, many see the haven of precious metal not being as needed or attractive as it is during poor economic times. At the current levels of gold and silver, they are both at their resistance levels. The 200 day moving average for gold is at $1415, which can signal a more downward slide in the commodity. So this is a good time to watch to see if the support level will hold. Analysts feel that this will all depend on what happens in Greece. Greece needs to prove that they are serious about their debt and how they get it in order. It’s the only way they will be able to receive any more bailouts from the IMF. If the latest measure fails and Greece can not get any more funds, then gold will continue to rise as more Europeans seek out to purchase more of the precious metal. If it goes the other way, where Greece does get the bailout, then stock markets around the globe should see a rise in trading.

Either way you look at it, precious metals, over the long haul will increase in value. I’ve been building a portfolio which holds 35% in precious metals. I do plan to scale out of it, but my opinion is that we’re not done with the economic woes. Politics have a lot to do with the news we’re hearing and I don’t have too much confidence in any government.

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Another Wild Ride On Wall Street

The day started like any other recent trading this month. The DOW opened flat and from there went on a slide which brought it down 116 points within the first ninety minutes of trading. The confidence in the economy has really put a lot of pressure on the strength of wall street. The DOW is heading for another losing week (7 out of the last 8). I not surprised since the economic data isn’t really looking so bright.

The S&P 500 is down 8% since it’s recent high even with all the bad news coming out. Today the S&P 500 is looking at a possible third day in a row for loses. It has shown to be able to hold on to some sort of strength through it all. Typically I would be getting ready for a decent rally in the markets, but this time I’m not too sure.

What about NASDAQ? well there have been quite a few disappointing numbers coming out from the tech sector, including Micron Technology Inc. (NASDAQ:MU) who has posted it’s less-than-expected quarter results. The street was expecting to see $0.16 on sales of $2.36 billion, but Micron has a $0.07 per share on $2.14 billion. Because of the poor performance, Micron Technology is down 13% for the day so far. What about Oracle? Oracle Corp. (NASDAQ:ORCL) even with it’s better than expected quarter, they are down over 4% for the day. Many analyst were expecting the technology sector to lead the markets out of the latest pullback, but it doesn’t look like it will be the case.

The gold and silver trading prices have fallen in the last two days because a stronger dollar, as well as the dollar being stronger against the Euro. Crude oil prices for today again dropped after oil took a nose dive yesterday after the news came out the there the International Energy Agency (IEU) would be releasing 60 million barrels of oil. Half of which is actually coming from the the strategical reserve of the United States.
My thoughts behind this move is that it’s a political/economic one to help the economy stay some what afloat. Seeing that oil prices is important when dealing with the economy since it will cause food and other prices to go up as well. We are looking at the beginning of inflation (if not already) and if fuel costs were to go up now, it would happen over night. Considering that in just the last year, when President Obama was asked about releasing some of the strategic reserve, his comment was some where along the way of saying…It would not be in our best interest to do it at this time, if ever.
Commodities prices have fallen across the board which is opposite when oil prices fall. So tell me what you think if you think I need to be corrected.
Be careful and happy trading.

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So Where’s The Recovery?

Wall Street took a beating this week and from what I can see, it will only continue when the stock market opens on Monday. So where’s the recovery?

Let’s look how well the employment numbers looked for the month of May. According to the report, only 54,000 jobs were added to the private sector during the same period. The bad part about that is that for the employment rate to hold steady, it must add 150,000 jobs each month just to keep up with the population growth in the U.S. So obviously, there’s no recovery in the job market.

How about the housing market? Well from what I’ve seen coming out over this past week, it also doesn’t look good at all. In some areas of the United States, home prices have fallen to the levels of 2002. In other areas like Las Vagas, the home prices have fallen to the levels of 1999. Many feel that the average home price will continue to drop for the remainder of this year. So I guess we can rule out that industry for showing signs of recovery.

So why is it that the stock market has been climbing since it’s bottom back in March of 2009. We’ll I feel that there was some companies that had solid fundementals and balanced sheet to continue to grow in the trouble economy. Remember that the indicies really only show the strength of the markets, not necessarily the strength of the economy. Of course many investors and traders were not completely wiped out financially and were willing to keep buying and selling.

How long can this keep up? In my opinion, not for long. Congress isn’t doing what they need to do and the present Administration is spending like a drunken sailor (I know that’s not fair to say about drunken sailors since drunken sailors spend their own money). It was reported this week that if a decision isn’t made to raise the debt ceiling, Moody’s has stated that they will decide on how they are going to re-evaluate America’s credit rating. Figuring that both the democrats and the republicans can not agree on anything, we’re going to lose our current rating and that will send this country into an inflation tailspin.

So if you’re thinking of trading in the stock market, tread carefully and be aware of the day by day issues going on in Washington as well as on Wall Street.

Happy trading.

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March Madness On Wall Street

Over the past two years the DOW has gained 95% since it hit it’s bottom of 6,547. Overall the markets as well as the outlook on the economy has improved greatly, but have we really stabilized the decay which was known as the housing market crash?

In the last month the DOW gained 1% and nearly 5% since the new year. Unfortunately I feel we’ve haven’t really solved any of the problems in our economy or in Washington. Congress is out claiming to cut the deficit and balance the budget. If the government was a corporation that was traded on the stock exchange, I wouldn’t even think of investing in it. Before I invest into a company, I look at their statements, earnings report, listen to their conference calls. I dissect the entire company’s financial so I know what I’m buying into. The U.S. government is running in the red and has pretty much tapped out on any more borrowing. Soon Moody’s is going to lower the country’s rating.

In the meantime Wall Street is going on like the world is financially sound and everything is going to be OK. Even though the unemployment rate has dropped to 8.9%, it doesn’t mean that more people are back at work. What it means is the the people who were collecting unemployment over the past 26+ weeks (in many cases, 99 weeks) are no longer on the register since they’ve exhausted all their benefits.

Look what’s happening in the United States over the past two weeks. Oil is now at $104 per barrel and the average price of gas has gone up over $0.30+ per gallon. At the time of this writing, the average price per gallon is $3.47. With the price of gas rising, in turn the price of food, services as well as any other product has also gone up.
Look at the price of gold today. At the moment the price of gold is $1428.00 per oz. Which also makes me think about how weak the American dollar has become over the same time period.

Well since March is here, let’s see if it comes in like a lion and leaves like a lamb. I believe that this month is going to be one to remember and I don’t mean that because of good things coming down the pike. If you’re one of the ones who think that this trouble is all behind us, well then go ahead and buy all the stocks your can, but if one of the many who are thinking like me, then you should be buying gold and trade some foreign currency since our dollar is weakening as we speak.
Either way…Happy trading.

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The DOW Closes Above 12,000

With the DOW climbing 148 points today and closing at 12,040, many are wondering if it can sustain this level. The DOW hasn’t closed above the 12,00 level since June 2008. It’s been a long two and a half years to get back to this level, but are we out of the woods yet?

I’m no expert, but I will say that any average Joe can see that the economy has not recovered no matter what the “reports” say. I travel a lot and where ever I go, I see many establishments that closed in 2008 and to this day most of them are still vacant. I know in the county I live in, the unemployment rate is nearly 14% and the state’s level is “projected” at 10.1%. I say “projected” because who are they trying to fool with that report? How many people are no longer collecting benefits and are still unemployed? They’re no longer being counted which according to realistic estimates, puts the national rate some around 18%-19.5%.

What about the housing market? The average home prices are starting to stabilize, but no one is ready to get out there and start buying property again. A report was released this week showing that over 11% of the homes in America unoccupied and more people are looking to rent than to own.

One thing we can see from over the last two and a half years is which companies were strong enough to weather-out the storm. I’ve been able to see some small cap companies grow in value at a steady pace with expected pull-back from the profit takers, only to continue the climb up. There are others that I’ve recently discovered that look to be contenders in a couple of years.

For the last few months I’ve been sitting on the sidelines watching the market. I’m not confident with the markets, the economy or the government at this time. Yes I have missed some good gains in stocks that I was invested in, but I sleep better just sitting it out right now. I love the stock markets and will always be involved with it, so for now I’ve been looking at some short/long term (2-4years) small caps that I will be investing in soon enough. I’m just waiting for a healthy pull-back (6%-9%) at then I’ll make my trades.

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Investments

I’ve been looking at the different industries and investment vehicles that are out there for the average investors. Depending on which types of investments out there, it may or may not be the time to invest. How can one know if an investment is right? Taking your time and doing the research to find out if it will be a profitable one or not. The housing market, the stock market or any other investment you have to choose from can be profitable, but unless you look at the real numbers and study everything there is to know about the investment prior to putting your money into it, you can lose most (if not all) of your capitol.

Yes housing prices are way down from their peak in 2006-2007, but that doesn’t mean that all housing prices are right for the picking. You need to look at the condition as well as the area the house is in. In some part of the country, housing prices may never reach the prices of just a few years ago.

What about the stock market? I don’t trust the stock market at this time since there is no reason for the DOW to be at where it is at the moment. Every month poor reports are being released (consumer confidence, unemployment and retail sales) and the stock market seem to either gains or holds it’s ground. We are in a terrible economic time and to think that the stock market will continue to hold is risky. The economic current events look pretty scary. If you’re looking to invest in the stock market, make sure you do your research into the company before you buy any shares. It’s the only way to know what stocks to buy now.

In my opinion, gold is the answer right now. I don’t mean stocks that trade off of stocks, I’m referring to actual gold. Gold as always retained it’s value or has gone up during trouble times like these. So when you invest, invest wisely.

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Is Now The Time To Invest?

During the last two years (2008-2010) we’ve seen the stock market as well as the housing market and financial institutions go through a very rough period of correction. Now in the second half of 2010, average investors are wondering if they should start investing again. Well it depends on what you’re going to invest in.

We are no where at there bottom or the worse of it yet, but at the same time I’m looking at many different investments I may want to get in on. I will say though that the stock market is not one of them at this time. In my opinion, there is no reason for the DOW to be over 10,000 and I do expect it to come back down below 9000. When I do not know, but it will be there in due time.

What about precious metals? There is only a limited amount of gold in this world and it’s one of the few things that will retain it’s value (if not go up) in our present economic condition. I’ve been building a portfolio of just different precious metals. If you’re looking to buy gold make sure you are buying actual gold pieces and not some paper stock that trades off of gold. Between the two, only actual gold will be worth anything when and if our economy crashes.

As for the housing industry, I suggest you take your time and look for solid and profitable deals. The housing market will not turn around any time soon so you will have plenty of time to find the right one for you. We will see foreclosures going on for years to come so prices will stay in the general area if not come down even more. As an investor, you will need to look at properties that will return to good value in five to eight years from now. The days of flipping houses are on hold and will be that way for some time.

Stay away from investing in any financial institution since they are still not sure of what will happen in time with all the government regulations that will be coming down the line. So is it time to start investing? Yes if you take your time and study what it is you want to invest in.

What happened to the stock market today?

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Which Stocks Does Your Mutual Fund Hold?

Mutual fund holdings are vital information to fund investors when evaluating a manager’s performance as reported. Without knowing what a fund’s holdings are, investors can neither fully appreciate why a manager has performed well, nor can they thoroughly come to grasp about any poor results. Even if a fund is doing ok, investors may decide that the fund investments are overlapping with their other portfolios or not in line with their own investing goals and want to relocate the money elsewhere. But without access to a set of complete information on a fund’s portfolio, investors are basically kept in the dark and can’t decide for themselves on any of those personal investment decisions.


What Does the Law Require
By law, mutual funds are required to release complete portfolio holdings only twice a year. For actively managed funds, in the interim of 6 months, their holdings could have been turned over many times and the information at investors’ hands can never be real time, live feeds, considering today’s online technology has made instant exchange of information nothing but possible. In fact, the decades-old securities law enacted such a rule because of the concern that fund companies couldn’t afford to mail out a report every day.


Objection to Frequent Portfolio Disclosure
Chief concern among mutual fund companies is that timely portfolio updates of fund holdings can tip off their intentions to the market. It may cause potential front run on a fund where other traders can buy shares ahead of the fund and drive up prices, while the fund is still taking the time to build up positions in a stock. But supporters of full, on-time publication of portfolio holdings argue that the hidden reason why funds are reluctant to do anything beyond what the law requires is that managers might be concerned about revealing questionable trading practice in any disclosure. Funds do a lot of window-dressing trading close to quarter end to boost performance and increase management compensation.


Other Concerns by Financial Advisers
Some financial advisory don’t think that requiring more disclosures of a fund’s holdings is a good idea. They contend that overwhelming information can lead investors to losing their long-term focus and becoming obsessed with fund trading. The advantage of having accessible information as claimed by some investors may be overblown. They also observe that people who are trading stocks and looking for ideas are more interested in getting a first look at a fund’s holdings.

Amid all the conflicting viewpoints, some mutual fund companies are stepping up to make more frequent disclosures on their portfolio holdings. More quarterly updates are now available, with monthly reports on top holdings. To the delight of some investors, a fund named OpenFund lets investors view active trading on its website, while others post weekly trading commentaries by fund managers. A standard monthly reporting ought to be possible if the idea of leaving out sensible trading information is made to consensus.

What happened to the stock market today?

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What Are Bull Markets And Bear Markets?

Just in case you are new to stock market investing, there will be two terms that you will hear thrown around quite regularly.   These are “bull market’ and “bear market”. These two terms will remain in your thoughts once you have survived a day in the stock market world. These two terms are important, that is why you need to familiarize yourself with them.


Here is a brief overview of the two terms, the “bull market” and the “bear market”. Let’s start with the bull market. The bull market is when most traders feel that they have felt something positive about a certain stock market and they want to buy stocks. This will usually happen during a long bull markets period that the stock market would keep going up and up.


As for the bear market, the bear market is actually the opposite of the bull market and it is when the stock market is constantly going down no matter what a trader would do. This will usually happen during the times that a trader loses sleep and if they continually wonder whether they should be selling their stocks.


However, most of the time the market is placed somewhere in between the bull and the bear market. Normally, the better stocks would go up over time and then the stocks of the companies doing poorly would go down. It is always considered wise to always try to pick a stock of company that is doing well or will do well when the time comes.


Now that you know the difference between a bull and a bear market, what does it mean for you.  Many times an investor has no control over what is happening in the world that affects the stock market.  If the market is experience a downward turn, it is a good idea to invest in defensive stocks.  Find those stocks that experience little volatility.  Another idea, is to go the sidelines and wait it out.  The problem with this trading technique is, you may miss the rally.

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Investing In The Financial Sector

There’s no doubt about it, the stock market can be a fantastic way to make money. Historical analysis shows that the rate of return on money invested in the stock market is, on average, better than that of money invested in government bonds, certificates of deposit, and most other investment options. However, it can also be a fantastic way to lose money if you are not careful, so that’s why it is absolutely vital that you know what you are doing before you go out and drop down some money for what is, in fact, nothing more than a few bits of information stored in a computer somewhere on Wall Street.


The stock market can be broken down into sectors based on the types of stocks for sale, such as blue chip stocks, industrial stocks, technology stocks, or financial stocks. The financial sector is a popular area for investment, but as with all stock market investments, and indeed all of life, it is important to know what your are buying before you buy it. What that means for you is that you need to research the companies that you are interested in.


All companies in the United States are required to send financial information to the Securities and Exchange Commission (SEC), which posts this information on its web site. By looking through the financial filings of companies, you find out a lot about them. Some things to look at are: how much the company owes, how much it makes per year, and how much it has paid out to investors in the past in the form of dividends. You can find out more about what to look for in these financial filings by going to your local library and checking out any book on the stock market.


There’s more to the stock market than just this, however. One thing that is hammered into the heads of all business school graduates is this: diversify, diversify, diversify. Think about it: if all of your money is tied up in one company, and that company goes belly-up, you have no hope. But if you have spread out your investments over many different companies, then you will take only a small loss. Something else to watch out for is becoming too attached to your stocks. We all have our favorite companies, but if your pet stock is showing losses quarter after quarter, it may be time to bail. It’s better to take a small loss now than to wait until that favorite company is selling for pennies per share.


There is much more to playing the stock market than just this, of course, but if you follow these few simple tricks, you’ll be well on your way to success.

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