Making Money Alert
Another Year, Another Bear?
01/14/2009
Stocks took another big tumble in Wednesday's trading, and by now I think most of us are suffering from what best could be described as bear market fatigue.
I know there were a lot of financial pundits who went on TV the first week of January to proclaim that 2009 would be a lot better than 2008. And while I hope they are right, I'd rather look at reality in the stark light of evidence.
As you can see by the chart here of the S&P 500 Index, its been virtually all downhill so far in the nascent stages of 2009. As of today's close, we are down nearly 7% on the S&P 500 in January, and that does not portend well for the return of the bulls to Wall Street.
Of course, we may get a nice bounce from here that could propel the market higher, but I think that any surge to the upside likely will be fleeting. Hey, I wish I were the bearer of some really bullish news about 2009, but unfortunately I must deal with things as they are, and not as I wish them to be.
The question for investors here is what do you do with your money, given this bear-fatigued market? Well, one way is to have a proven plan in place that keeps you away from bear markets and puts you back into stocks when the bull comes back on the stage.
For more than three decades now, following a plan is exactly what subscribers to my Successful Investing advisory service have been doing. If you'd like to find out more about how to navigate this market storm with a plan that provides an even keel, click here.
20 Questions to Ask Your Advisor
I recently came across a statistic published by the Security and Exchange Commission’s Office of Investor Education, which stated that more than 50% of investors seek the advice of some type of advisor when making financial decisions.
But the problem here, as I see it, is that most investors really don’t know the right questions to ask their advisors. How do you know that your interests are being served by your advisor? How do you know if your goals comport with the kind of investments your advisor recommends? The only way to know is to ask the right questions.
Unfortunately, it’s just a fact that most investors aren’t as financially literate as they need to be, and this is a situation I won’t stand for any longer.
To help you better understand your financial relationships, I have compiled my list of 20 questions to ask your advisor. A complete list of questions can be found by clicking here.
If you find your advisor unable or unwilling to give you satisfactory answers to any of these questions, you may want to rethink your relationship.
Could Munis be the Next Bull Market?
As the economy slows, one reasonably safe sector that you may want to consider is municipal "muni" bonds. Muni bonds are issued by cities, states and other local governments to raise money for all kinds of public sector construction initiatives, such as schools, roads and bridges.
The competitive yields now offered by muni bonds make them extremely attractive to investors. Since the interest yielded on these bonds is usually exempt from federal taxes -- and maybe even state and local taxes if the investor is a resident of the state or city that issues the bonds -- you have an investment offering a one-two punch of solid yields and excellent tax savings.
To find out more about the muni bond landscape, I called in one of the country's foremost experts on the subject, SNW Asset Management portfolio manager Anthony Baruffi.
If you'd like to find out more about the current state of the muni bond market, as well as the outlook for the sector in 2009, then you need to listen to my interview with Anthony.
To listen now, click here.
ETF Report 2008 -- The Final Results Aren't Pretty
As you might expect, the final performance results for most ETFs in 2008 wasn't very pretty. In fact, it was downright coyote ugly!
Interestingly, despite the tremendous bear market in 2008, the number of new ETFs that came to market during the year was remarkable. There were 764 total ETF offerings by year's end, which is 154 ETFs more than there were at the end of 2007.
Notable trends in the ETF landscape include new triple-levered funds, currency-oriented funds, and international market funds.
I know it might not be a comfortable task, but if you want to remind yourself of how bad things were in 2008, then take a peek at the year-end ETF Report by clicking here.
Why You Should Read the Alert Every Week
During one of the holiday parties that I attended recently, I had a man ask me a curious question. He asked me why it was so important to read the Alert every week. I never really thought about this before, but when forced to answer, I came up with what I think are a great set of responses.
This man must have thought they were good responses, too, as he promptly gave me his e-mail address and asked me to add him to the list of Alert subscribers. Here are a few of my off-the-cuff reasons why he -- and you -- should read the Alert every week.
- Our bear market call in 2008. Yes, we got it right, and we got it right early. Nearly a year ago, we told you that this market was getting ugly, and to make sure you had stop losses in place and a high-cash position. I think the reality that followed vindicated this call beautifully.
- Ongoing ETF education. Each week, we give you invaluable information about what's happening with the hottest and, in my view, best investment tool in your arsenal: exchange-traded funds.
- Pinpointing dangerous sectors. There are a lot of minefields out there, and we've proven that we can keep you away from the most perilous. A case in point was our recommendation to steer clear of financial stocks early on in 2008.
- Empowering you with analysis. The purpose of the Alert is not only to educate, but to empower. By knowing about the market, and by applying rational analysis to a sometimes irrational business, you can put reason on your side. And reason, held firmly in her seat, empowers everyone.
I hope this clears up any issues regarding the why of this publication.
ETF Trader Ranked No. 4 in 2008
The Hulbert Financial Digest just published its list of the Top 10 performing newsletters of 2008, and I am proud to report that my ETF Trader advisory service came in fourth overall!
Our total return of +13.2% bested nearly 200 other newsletters and trading services to capture the number four spot on the prestigious list. In terms of dedicated ETF services, ours topped the list. To read the MarketWatch article, click here .
I must admit that this is an enormous source of pride for my team and me. In a year when the S&P 500 was down nearly 40%, and in one of the toughest market environments in history, double-digit percentage returns are almost unheard of. Yet that's what we managed to accomplish with a little sound judgment, some tight stop losses, and some great timing.
In this oh-so-difficult year, it's nice to be recognized for thinking unconventionally, and for some solid money-making moves.
If you'd like to find out how to make money using my ETF Trader advisory service, simply click here.
New Radio Show Time Slot
First of all, let me take this opportunity to thank all of you who listen to my radio show every week. I truly love being on the radio, and your support helps keep me there. With that said, I want to announce a new time slot for my Saturday show in Phoenix, Ariz.
Doug Fabian's Wealth Strategies radio will now air at 11 a.m. Mountain Time on KFNN, 1510 AM in Phoenix, and 10 a.m. Pacific Time on KRLA 870 AM in Southern California.
If you're not in one of these markets but still want to listen to the show live, you can do so online. Just click here for details on how you can listen live.
I am looking forward to another great year on the air, and I invite all of my Alert readers to join me.
Humble Humor
Oh Lord it's hard to be humble
When you're perfect in every way
I can't wait to look in the mirror
'cos I get better looking each day
To know me is to love me
I must be a hell of a man
O Lord it's hard to be humble
But I'm doing the best that I can
--Mac Davis, It's Hard to Be Humble
Next week we'll have a whole new executive branch, and all I can say is that I hope the newcomers heed the satirical warnings of country singer Mac Davis. As we all know, power and humility mix the same way oil and water do, i.e., they don't mix. Let's hope that the new administration's promise of change includes a heavy dose of humble humor -- and a reluctance to overstep governmental boundaries.