Making Money Alert
Riding High on New Highs
10/10/2007
You gotta love it!
I have to admit that right now I am riding high on all of the new highs this market is giving us. On Tuesday, we saw a surge to new highs in both the Dow Jones Industrial Average and the S&P 500. Sure, the market pulled back a bit today, but that pullback can largely be attributed to just a couple of isolated pieces of negative company news.
The real significant news is that Tuesday's big market surge came right after the release of the minutes of the Fed's Sept. 18 meeting. The minutes clearly showed that the members of the Federal Open Market Committee were worried that a jarring credit crunch would stifle the economy.
The Fed unanimously agreed to a 50-basis-point rate reduction and described it in the minutes of the Sept. 18 meeting as "the most prudent course of action." The Fed also explained that lowering its interest rates "was appropriate to help offset the effects of tighter financial conditions on the economic outlook."
In addition to the Fed's demonstration of support for the economy and for investors, I'm also riding high on the back of history.
According to the Stock Trader's Almanac 2007, the most lucrative time to be invested the stock market is from November to April. In fact, for the past 57 years the Dow Jones Industrial Average gained a total of 12,850 points over the November to April months. Contrast that with the miniscule gain of only 174.61 points between the months of May through October.
These numbers certainly lend credence to the old Wall Street proverb, sell in May and go away. Of course, the corollary to this rhythmic warning is -- buy in November and hang on through April.
Now, I am not advocating this simple seasonal strategy to portfolio management for Alert readers. Rather, I bring these statistics to your attention as a way of letting you in on why my optimism meter is nearly off the charts.
Consider this little fact: If you had invested $10,000 in the stock market, but only kept your investments from November to April during the past 57 years, you would have nearly $600,000 today. If, however, you had kept your investments in the market from only May to October, the value of your investment only would be worth about $10,350, or just barely more than you had invested 57 years ago!
As the saying goes, numbers don't lie.
I recently recommended that subscribers to my Successful Investing advisory service take an aggressive allocation to broad-based domestic and international exchange-traded funds (ETFs) and mutual funds. I've also recommended an allocation to several sectors and sub-sectors of the market that I think have the potential to really outperform the average market return.
If you'd like to find out how to take advantage of this fantastic new bull market, and how to ride high on this tremendous buying opportunity the market has given us, click here.
New International Treasury Bond ETF
State Street Global Advisors recently launched a new exchange-traded fund focused on bonds. It's the SPDR Lehman International Treasury Bond Fund (BWX). This new fund, which began trading on the American Stock Exchange Friday, Oct. 5, is the first international bond ETF available to U.S. investors.
This ETF carries an annual expense ratio of just 0.5%. That's really low -- considering you are getting access to a variety of international fixed income assets. To give you an idea of how varied BWX's holdings are, consider that it provides exposure to 674 issues from 18 countries. Those issues are denominated in 11 currencies.
International bonds are an asset class that historically has had a low correlation with the U.S. stock and bond markets. So, if you're looking for diversification at low cost and ease of entry, BWX is a new ETF that you just might want to consider.
Wealth Strategies 2009
Do you have the investing skills you need to grow your wealth?
Unless you answered absolutely, positively, yes, you need to hear what our team of experts has to say.
Announcing the WEALTH STRATEGIES 2008 seminar -- a one-day, eight-hour, five-expert extravaganza of investment information.
This seminar is titled: Building A Roadmap to Grow Your Wealth 20% in 2008
It will be held: Saturday, November 10, 2007 - 9:00 a.m. to 5:00 p.m., at the Orange County Hyatt - Garden Grove, Calif.
Important Notice: Early Bird Savings -- Be One of the First 50 to Register and Save $20!
Click here to sign up now and reserve your seminar spot.
Dear Investor,
The coming year offers unprecedented opportunities for investors to grow their wealth faster than any time since the tech boom. The key to taking advantage of these opportunities is having the right combination of skills, knowledge and information.
Wealth Strategies 2008 was designed from the ground up to give you the inside information that you need to succeed. Let's face it, you work hard, do a good job of saving money and still find it tough to grow your wealth as quickly as you want.
You can't afford another year of subpar returns on your investments. In this intensive, one-day, investor-training event, our dream team of experts is going to equip you with the knowledge and skills you need to supercharge your investment returns. Together, we will present a road map that will enable you to grow your wealth more rapidly than ever before.
In just over eight action-packed hours, you will hear:
Tom Leykis, radio talk show host and self-made multimillionaire, talk about the winning mindset he cultivated to help him become one of the most successful radio talk show hosts in the country, and how he made millions in stocks and real estate by sticking to his controversial, yet very pragmatic life principles.
Doug Fabian, the Money Maverick, revealing the keys to successfully utilizing the most innovative and profitable financial services vehicle ever created.
Dr. Peter Navarro, author, economist and professor, discussing his new book, The Coming China Wars, and how you can profit from the massive opportunities arising from China's disarray.
Josh Lewis, real estate and mortgage expert, explaining how to protect yourself from the housing bear while preparing to profit from the greatest buying opportunity EVER in Southern California real estate.
Keith Fitz-Gerald, International Trading Guru, will show you how to profit from the global opportunities ready to explode as China begins to deploy the government's $1.3 trillion cash stockpile.
If you were to attend individual events with any of these visionaries, you could expect to pay anywhere from $100 to $250. One-on-one consultations with each of these gentlemen run from $300 to $500 per hour -- if you can get on the schedule.
To get all four, in one room, on one day, revealing what they know about turbo-charging your returns and growing your wealth as quickly as possible, what would you expect to pay? How about $1,500, $1,000, or even $5,000? Most investors would be willing to pay that kind of money, but the good news is you don't have to fork over nearly that much.
Thanks to the Wealth Strategies 2008 sponsor, KLSX 97.1 Free FM, the price is so low it will astonish you. You only will pay $99. For only $50 more, you can bring a spouse or friend. With the cost of admission this low, you will feel like you owe the speakers more for everything they shared with you.
But it gets better. If you are one of the first 50 people to register, you can take off an additional $20, paying only $79 or $129 to share the experience with a friend.
Click here to sign up now and reserve your seminar spot today!
Don't miss this once-in-a-lifetime event
Blogs Away: The Dr. Peter Navarro Interview
This week I'll tell you about my Oct. 6 interview with Dr. Peter Navarro. Peter is a business professor at the University of California, Irvine, and author of the provocative best-selling book, The Coming China Wars, a book I strongly recommend.
Peter's appearance is must-listening for traders and investors, as increasingly, China's fiscal, monetary, and trade policies are influencing -- and in some cases rocking -- both the stock and bond markets.
In our interview, Peter discusses the impact of China's large, primarily dollar-denominated foreign reserves, on interest rates, mortgage rates, and the current housing sector meltdown. The clear danger, says Peter, is that China may begin dumping U.S. dollars, bonds, and other assets in retaliation for a crackdown on China for its unfair trading practices.
To listen to the audio blog, simply click here.
Fabian Roadside Assistance 2
As I am a big fan of the metaphor to help bring clarity to the subjects of investing and personal finance, I want to introduce you to a metaphor I think perfectly illustrates the kind of service we provide at Fabian Wealth Strategies.
First, picture your financial holdings as an automobile that will take you down the highway toward your ultimate destination, retirement. To get to that destination, you have to make sure your auto is equipped for the journey.
You have to make sure you have enough gas. You have to check your oil regularly. You have to check your tire pressure and you have to pay attention to all the traffic signs along the way.
Failure to do any one of these things can result in you ending up stranded and in distress on the side of the road.
Fortunately, getting your financial automobile back in perfect operating condition is what Fabian Wealth Strategies is about.
Think of us as your financial roadside assistance provider.
At Fabian Wealth Strategies, we can help you correct any neglected aspects of your financial automobile. If you need more life insurance, we'll tell you. If you need to generate more income, we'll identify that too. Need to increase your tax-deferred investments? We can show you how.
Taking this analogy a step further, you might say that in addition to being your financial roadside assistance provider, we also are master mechanics. That means we can rebuild your engine and get your automobile back firing on all cylinders.
If you are in need of some financial roadside assistance, Fabian Wealth Strategies can help. All you have to do is call us and schedule your very own coaching session.
For more information on how to schedule your coaching session, call David Fabian at 800.391.1118 or e-mail him.
Taking Note of Yourself
"One is unable to notice something -- because it is always before one's eyes."
—Ludwig Wittgenstein, Philosophical Investigations
Often, the biggest obstacle to success in life is our own shortcomings. The problem, however, is that it's really hard for each of us to recognize our own flaws. If you want to improve any aspect of your life, one way to start is to try and to look at yourself from the outside with a brutally honest lens. It only is after you train a scrupulous eye on yourself that you can ever hope to make improvements in your own life.
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 Alert readers, send it to me, along with any comments, questions and suggestions you have about my radio show, newsletters, seminars or anything else.