12/14/2005
The recent stock market ascent has given investors much to be pleased about, especially when 2005 was starting to look much like the lukewarm years that have preceded it since the turn of the millennium.
The one good thing about flat markets is they bring investors back down to earth as to what they can reasonably expect from the equity markets. As I have said so many times before, the heydays of the 80's and 90's were phenomenal and wonderful, but they were an anomaly. It was during that time that investors decided it was okay to pay a mutual fund manager a big management fee because, quite honestly, they were making so much money, it just didn't matter to them. Well, flash forward to the new millennium and the new reality and investors realize that fees can make the difference between a profit and a loss.
While we all loved the days of the year over year returns that showed us 20%+ in gains, it is in the times of smaller returns that we learn the lessons that will prepare us for bigger gains in the future.
As we all know so well, it's not what you make, it's what you keep. I want all of my readers to pledge that 2006 is the year they make themselves rich, not everyone else.
If you consider the money you literally throw away in unnecessary fees, commissions and just miscellaneous expenses, it could add up to literally thousands of after-tax dollars that could go in to our investment accounts.
In an attempt to get you off on the right footing for 2006, I am giving you a special gift of my preferred choices for all of your financial needs. My favorite picks are as follows:
INVESTING:
• TD WATERHOUSE
• AMERITRADE
• SCOTTRADE
BEST VALUE FUND FAMILIES:
• AMERICAN CENTURY
• T. ROWE PRICE
• FIDELITY
INSURANCE & ANNUITIES:
• AMERITAS DIRECT
The Federal Reserve raised interest rates, yet again, yesterday. The market responded by adding a nice 56 points, enough to put the end of the year rally back on track.
The best news to come out of the Fed meeting was the sentiment that both short-term and long-term inflation seem to be under control. That's great news because it means that further rate hikes may not be necessary. The Fed Funds rate now stands at 4.25%.
The nod from the Fed is good news for our investments, as we can look forward to the nation's top bank returning to a more neutral stance that could pave the way for a nice upward momentum as we move into the New Year.
The energy sector may have established a short-term floor here and I am encouraging my readers to hold onto their energy positions. Additionally, our international investments are continuing to outperform domestic equities as EWJ ratcheted up over 2% in one overnight session.
I strongly encourage my readers to explore the implementation of ETFs to reduce fees and improve performance. Additionally, some international ETFs are on fire right now as we see some countries growing at a rate that is literally three times that of the U.S. economy.
My favorite investments at this juncture are:
• Large cap growth funds
• Mid-cap growth funds
• Technology
• Energy
My Successful Investing subscribers continue to enjoy their holiday season with big profits in their stockings as our well-timed buy just looks better and better with each market closing. I am thrilled to be a part of my subscribers' success.
That's the most important aspect of investing: making the most of what the market gives you. No matter who we are, we can't manipulate the markets, we can only respond to them. And the sooner we respond, the more money we will either make or save—depending on the market's direction.
Are you making the most of this market? I hate to be the bearer of bad news, but this upward momentum won't last forever. That's why it is extremely important for you to maximize gains while you can. The funny thing about market upticks is that people kind of take them for granted. That is, until they end.
The long-term prognosis for the stock market is not rosy. There are just way too many factors of global proportions weighing on our economy and the world economy. Much like the holiday season, you have to enjoy it while it lasts because it will end sooner than you think.
For less than 50 cents a day, you can become a member of my Successful Investing group. I will personally advise you what to buy and when. I will monitor the trends for you so I can tell you when to exit those positions to preserve your gains and your principle. And the best part is, I will give you all of the advice you need to make and keep a fortune and I will let you have it all risk-free for up to 6 whole months so you can make an informed decision about whether my Successful Investing service is perfect for you. I am betting you are going to love the recommendations, the tips and the gains. Happy Holidays! The risk is all on me if you click here now: http://www.fabianssuccessfulinvesting.com/visitor.php?offer=12
Earlier this month, Alan Greenspan warned that record deficits, both trade and budget will make for "extremely painful adjustments" if the U.S. does not reverse its course of overspending and the use of protectionist trade barriers.
Today's release of the trade deficit numbers is proof positive that we are rushing headlong into a very difficult future as the trade deficit hit a new record high. So high, in fact, that we increased the margin between what we buy and what we sell overseas by an exorbitant 4.45 percent in just one month.
Greenspan's remarks foretell a massive bear market for equities should the U.S. continue down this path. You and I have absolutely no control over the deficit spending, but we have to prepare ourselves for the inevitably of the "extremely painful adjustments" about which Greenspan warns.
The best way to prepare for the economic fallout that will arise out of the runaway spending is to carefully monitor your investments with a well-thought-out exit strategy for your investment accounts.
A market reversal can be very quick and very painful. To attempt to react in a rational manner in the heat of the panic is unrealistic. I sincerely wish that all my readers profit in 2006, and by setting your accounts up in a lower fees environment will make such a goal attainable.
If you would like my advice on how you can protect your nest egg against "extremely painful adjustments" send me an email at askdoug@dougfabian.com. A bear market loss is unnecessary, most often it is unrecoverable and it is most always avoidable. I'd be happy to tell you how.
My dear friends, we are looking at closing out 2005 with some tidy profits. The New Year appears to offer both opportunity and challenge. Take this time between now and the beginning of the New Year to contemplate how you can make the most of both. Preparing, planning and protecting can help you keep your eyes fixed on your goals regardless of the bigger forces at play. And remember this:
"Success always comes when preparation meets opportunity."
--Henry Hartman