04/19/2006
You've gotta love it!
On Tuesday stocks finished the session sharply higher, putting in their best one-day performance numbers in over a year.
The Dow surged almost 195 points, or 1.8%, while the S&P 500 vaulted just over 22 points, or 1.7%. The Nasdaq Composite led the major averages with a 45-point, or 2% leap into the plus column.
The market took off immediately after the release of the minutes of the Fed's March meeting. It certainly seems as though Wall Street is optimistic that the rate-hiking odyssey the Fed has been on since June 2004 will in fact be coming to an end real soon.
The key here to the authenticity of this current rally is a few confirmation days. In fact, we need to see some confirmation that yesterday's big move to the upside was more than just a one-hit wonder.
Follow-through is key to confirming broad market trends, and it is going to take a few more sessions before we can confirm yesterday's move as the start of something big for stocks. Today's action didn't hurt the market's chances of climbing, as we finished the trading day with a small move to the upside.
I would have been more concerned about a failed attempt higher if we would have had a big selloff in Wednesday's session. That didn't happen, so chalk one up for the bulls.
Anyone who has even a casual acquaintance with searching the Internet knows about keywords. Those are the words you type into a search engine like Yahoo! or Google so that you can find whatever information you are looking for. Type in the correct keywords and the information you need is usually right there.
Lately I've received a lot of e-mail asking me how best to follow the Successful Investing plan recommendations in a 401k or 403b retirement account. Most likely in these limited-choice plans, you won't have access to my preferred investment options, exchange traded funds (ETFs). You will probably have access to only a few diversified domestic and international stock funds, and maybe if you're really fortunate a few sector funds and some company stock.
Here's a representative question I received just the other day from one of my subscribers; "Doug, how do I know which mutual funds to choose from? My 401k plan has several options, but none of the funds you're recommending are available to me? How do I know which funds fit best with your plan?"
Well, the answer to this question and similar questions about how to choose the right mutual fund in your 401k or 403b is just as easy as searching the Internet. All you have to do is know your mutual fund "keywords."
Let's go over what kind of keywords you are likely to find in a typical 401k or 403b. If you were to look at your 401k options, I'm sure most of you have a selection of stock funds with something like the following descriptions: "large cap," "small cap," "mid cap" and "international."
Within the description of each of the mutual funds, there will likely be keywords such as "growth" and "value." These keywords describe the type of companies and the investment style that the managers of these mutual funds use to direct their stock selections.
In most 401ks, you will also likely have a bond fund option and a balanced fund option. The bond funds and the balanced funds will usually contain the following keywords: "income" and "equity and income." There will also undoubtedly be a fund option described as "capital preservation" or simply, "money."
In my Successful Investing service I give subscribers specific buy and sell recommendations, but I also tell them how to position their assets properly in a limited-choice, 401k-type plan.
One of the ways we do this is by using these mutual fund "keywords," as they can be employed as a guide to help subscribers match up the kind of mutual funds we are recommending with the kind of mutual funds that are available in their specific accounts.
A new feature we've added just this month to Successful Investing is what we call our "401k Model Portfolio."
We know your choices are limited in a 401k or 403b retirement account, and that often makes it impossible to invest in many of our recommended sector ETFs. So, for those of you out there who are currently only investing through a 401k-type plan, we've now added something specifically for you.
Would you like to discover how to maximize your 401k dollars? Would you like to learn how to profit in the market regardless of its direction? Then I invite you to click on the link below and find out more about my Successful Investing service:
http://www.fabianssuccessfulinvesting.com/order.php?offer=12
We talked about a bull stampede in commodities last week in the Making Money Alert, and boy, it seems as though our timing was perfect.
This morning we saw oil prices vault above $72 a barrel for their third straight record-setting day. This morning's catalyst happened to be a U.S. government report that showed shrinking gasoline supplies.
Commodities traders were also focused on nuclear tensions between Iran and the international community, as well as supply constraints in Nigeria, the Gulf of Mexico and Iraq.
On the precious metals front, gold futures peaked at more than $630 an ounce after the minutes from last month's Fed meeting were released. Silver was also higher, as the May silver contract rose 38.5 cents to a $14.17 an ounce -- a fresh new 23-year high.
Can commodity prices get any hotter than they are right now? Well, yes, they can. Furthermore, I think they probably will. Now I am not saying there won't be a pullback in the already sky-high commodities markets such as oil, gold, silver, copper, natural gas, etc. But long-term trends are certainly lining up in favor of energy and higher precious metals prices.
If you've been looking for ways to profit from boom in commodities, you owe it to yourself to check out my ETF Trader service. Hey, it often pays to "strike while the iron (or oil, gold, silver, etc.) is hot," and that's exactly what we are doing in the ETF Trader right now.
https://www.fabiansetftrader.com/order.php?offer=18
There are those who champion free markets and capitalism because they are practical and because they provide the greatest good for the greatest number. These advocates of capitalism aren't wrong in their claim, but their advocacy comes from only a pragmatic point of view.
But there is one advocate of capitalism that unabashedly defends the system on moral grounds. I am talking here about the novelist/philosopher Ayn Rand, whose grand-scale novels The Fountainhead and Atlas Shrugged are must reads for anyone who loves great literature, heroic role models and sophisticated ideas.
Check out some of what Rand has to say about capitalism. I think you'll agree with me that she is perhaps the greatest advocate of capitalism ever.
"The moral justification for capitalism does not lie in the altruist claim that it represents the best way to achieve the common good.' The moral justification of capitalism lies in the fact that it is the only system consonant with man's rational nature, that it protects man's survival qua man, and that its ruling principal is: justice."
"Capitalism demands the best of every man -- his rationality -- and rewards him accordingly. It leaves every man free to choose the work he likes, to specialize in it, to trade his product for the products of others, and to go as far on the road of achievement as his ability and ambition will carry him."
You've got to love Rand's unapologetic and passionate advocacy of capitalism. We should all be so passionate about our convictions, and the lesson we should all take from her is to appreciate, and take advantage of, living in the freest and most prosperous country ever.
Wisdom about money, investing and life can be found anywhere. If you have a good quote you'd like me to share with your fellow Making Money Alert readers, send it to me, along with any comments, questions and suggestions you have about my radio show, newsletters, seminars, or anything else.