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Intermediate Bull, Immediate Bear

09/08/2010

During the last couple of weeks, my research team and I have been keenly focused on ways to make our clients, and our readers, big money in the remainder of 2010 and right on into 2011. What I’m actually finding is, and this is much to my surprise, that there are a lot of reasons to be bullish going into 2011.

Yes, for many months now I have been recommending a high cash position to not only my Fabian Wealth Strategies clients, but also to subscribers of my investment advisory newsletters. Frankly, I am quite proud of the fact that for the most part, we managed to emerge free from any damage after the horrifically volatile summer of 2010. Of course, we took a few exits along the way, but we also caught a few big waves that we’re still riding high.

The way I see it, we have seen a slowdown in most domestic economic metrics (GDP, housing numbers, employment). Yet despite the slowing, we are by no means seeing a collapse in the U.S. economy. Sure, there still are big problems with European debt and the deleveraging that needs to take place in that region. U.S. debt levels also are troublesome, as are individual state and even individual consumer debt burdens.

Given all this, why am I optimistic here? Well, I guess you could say my optimism can be described as being an intermediate-term bull and a short-term bear. I do think we have some kinks to work out in the global economy, and until we do so, we are liable to see stocks sell off at the hint of any downbeat news that confirms the bearish thesis. That being said, the contrarian in me feels that when everyone is too bearish, it’s time to be a bull.

I suspect that we could get a nice fall season bounce in stocks, perhaps as strong as the bounce we witnessed back in March 2009. Now, I know this runs against the doom-and-gloom merchants peddling fear and loathing of the economy and our markets, but I think it’s high time we ignore the naysayers and get ready to pounce on some low-risk buying opportunities.

So, while I am not ready to pour my heart out and fall in love with equities just yet (remember, I am a short-term bear), I do think that a nice buying opportunity could come soon -- particularly if there’s a changing of the guard in Congress come November.

If you’d like to find out how you can get your portfolio ready for the intermediate-term bull, then I invite you to check out my Successful Investing advisory service today.

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