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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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