Making Money Alert
THE FED SPEAKETH
10/31/2007
The Federal Reserve rendered its decision on interest rates today, and the central bank acted the way most on Wall Street thought it would.
Mr. Bernanke and his colleagues opted to cut the federal funds rate and the discount rate by 25 basis points, a move I think already largely had been priced into stocks.
In fact, I wasn't the least bit surprised with today's Fed decision. With oil prices soaring and the housing market sinking, the Fed almost was forced to cut rates to keep the economic goblins at bay.
I think that if the Fed would have cut rates by 50 basis points like it did back in September, it would have been viewed as major red flag that things in credit land were much worse than anyone thought.
If the Fed failed to cut interest rates, the move would have been viewed as a big negative for stocks, and I think we would have seen the major averages plunge headlong into a nosedive.
Fortunately, the Fed gave us all what we expected. Hey, there's nothing Wall Street likes better than a sense of certainty, and today's decision on interest rates was about as certain as it gets.
Before we leave the topic of the Fed, I want to mention that today we saw economic data indicating that the economy picked up speed in the summer, growing at a brisk 3.9% pace, the fastest rate in more than a year.
Today's data from the Commerce Department suggests that the economy is demonstrating a lot of resilience in the face of big housing and credit market woes.
It will be interesting to see what the Fed does at its final meeting of the year in December. As always, the data will dictate the Fed's actions, but if we continue seeing strong economic numbers such as we saw today, predicting the Fed's next move really could get tricky.
Techs vs. Financials
There is a big battle raging in the financial markets right now between tech stocks and financial stocks. For the past several years, financial stocks have beaten up on techs, with many of the big banks pulling the bull market higher.
But in the past few months, the trend higher in financials has really hit the skids. Look at the chart below of the Financials Select Sector SPDR (XLF).
As you clearly can see, the financial sector really has been hammered since hitting its June high. The culprit here, of course, is the subprime mortgage and credit market meltdown. Problems in the financial sector will, in my opinion, likely continue for some time to come, and in no way do I think financials are out of the grasp of the bear.
If you are holding a lot of financial stocks in your portfolio, I urge you to consider paring down your exposure to the space.
In almost direct contrast to the trend in financials is the trend in technology stocks. Look at the chart below of the PowerShares QQQ Trust (QQQQ).
Here we see the technology sector absolutely on fire since mid-August. Earnings in the space have been fantastic, and investors are fleeing from financials in favor of technology stocks.
I think technology is one of the places you want to be with your investments right now, so if your portfolio doesn't contain much exposure to tech stocks, you might want to reallocate some of your resources to start taking advantage of this fast-moving sector.
Right now, subscribers to my Successful Investing advisory service have a healthy exposure to technology stocks. More importantly, we are avoiding any direct exposure to the financial sector.
Wealth Strategies 20010
If you're not investing 40% or more of your portfolio overseas, then you don't know what you don't know!
On Saturday, Nov. 10, I will be hosting an all-day event in Orange County, Calif., dedicated to your success in the coming year.
In this seminar, you'll discover why now is the time to:
Increase your overseas investments;
Get ready to buy real estate;
Profit from the China economic phenomenon; and
Gain a complete understanding about how exchange-traded funds (ETFs) work, and how you should be using them to help create wealth.
Let's face it, during the past 90 days we have experienced unprecedented volatility in the financial markets. Interest rates, bonds, stocks and currencies have fluctuated wildly for one reason and one reason only -- investor uncertainty.
Investors around the world are reassessing their future risks and opportunities. The most important question for you and your family is: Are you prepared for another year of this wild market uncertainty?
In my roles as investment advisor, radio talk show host, and wealth consultant, my overriding mission is to help educate investors and make them aware of what they need to do to prepare for another year of volatile, uncertain markets.
That's why I am really excited about my upcoming Wealth Strategies 2008 investor conference. In just one action-packed day, you'll find out how you can grow your assets by 20% or more during the next 12 months.
I know that is a big promise, but given the unprecedented era of investment opportunity in front of us, I think it's a promise my team can keep. In all my years of investing, I have never been more excited about the future than I am right now. Let me share with you four reasons why 2008 may be the best investing year of your life.
Global Economic Growth is 300% Greater than the U.S. Economy. Never before in history has the promise and benefits of capitalism touched the lives of so many people around the world. This means huge investment opportunities outside of the United States.
China Becomes the Third-Largest Economy in the World. The emergence of China as an economic superpower is extraordinary. Just as the United States has dominated the economic landscape for the past 60 years, now China will affect your life in many ways. Your job, your mortgage, and of course your investment portfolio all will be affected by China's economic awakening.
The Down Trend in Real Estate Equals Opportunity. Record foreclosures and the economic impact of the bursting real estate bubble provide a truly extraordinary but untapped opportunity to buy real estate at prices 30-50% below peak levels.
The Emergence of the Single Greatest Investment Tool since the Mutual Fund. You may not be aware of the power and opportunity of exchange-traded funds (ETFs), but I am here to tell you that this investment tool can change your life. Once you have the knowledge of how ETFs work, you will be amazed at the growth potential for your investment dollars.
These four subjects are the focus of my one-day event on Saturday, November 10, 2007, at the Orange County Hyatt in Southern California. On that day, you will experience a comprehensive wealth-enhancement conference designed to grow your assets 20% or more in 2008. Here is our speaker lineup for this event:
International investing specialist Keith Fitz-Gerald will speak about the Global Opportunities for your portfolio in 2008. Keith is a respected market professional with nearly 20 years of experience. He has an extensive insider's network that he puts to work for you to get the inside track on what's really happening in global markets. He also is a professional trader and a licensed CTA who advises institutions and individuals.
China Expert Peter Navarro, author of the best-selling book, The Coming China Wars, also will present. Peter will showcase his insights on How China will Impact Every Aspect of Your Financial Life. He also will tell you how you can profit from the emergence of this economic superpower.
Real estate advisor Josh Lewis is another featured speaker. He correctly called the top in the real estate market back in September 2005 and now he sees The Greatest Buying Opportunity in Real Estate investing in the past 10 years just on the horizon. You'll definitely want to be ready when the opportunity presents itself. With Josh's help, you'll be well prepared.
And finally, I will be the host of the entire full-day event. As a bonus, I also will be presenting my seminar about ETFs: The Future of Investing. This seminar will teach you how exchange-traded funds can make your investing endeavors simple, inexpensive, profitable and even fun!
Join me at the Wealth Strategies 2008 conference. The cost is just $99, and if you want to bring your spouse or a friend, its just $50 more. The opportunity to listen to some of the sharpest minds in the investment world will happen on ONE day and ONE day only -- Saturday November 10, from 9:00 a.m. to 4:00 p.m. at the Orange County Hyatt.
ACT NOW To reserve your space! Seating is limited, and you don't want to miss out on this event. If you aren't completely satisfied, we offer a 100% money back guarantee. Simply click the button below to sign up or call 888.300.3684. I'll see you there!
P.S. To listen to a free preview of what will be discussed at Wealth Strategies 2008, Click Here
Coaching is King
I can't tell you how gratifying it has been coaching investors around the country about how to successfully manage their wealth.
I used to think getting in the game as a player was the most exciting thing about the investment business. But what I've come to discover over the past year is that coaching is king.
There absolutely is nothing more rewarding than sitting down with an investor and helping him or her design a wealth plan that focuses on meeting specific goals.
The process of wealth coaching is really simple. I meet with you one-on-one in two separate interviews. In those interviews, we document your short- and long-term goals; discuss your concerns, worries and even fears about your money; we review all of your invested positions; and I give you my opinion about each.
Then we develop a sample ETF portfolio designed to meet your unique objectives. I also give you specific action steps you can take to help move your financial situation in the right direction.
If the idea of having your very own wealth coach appeals to you, I urge you to get started now. "Money never sleeps," as the old adage goes, and everyday you wait to get on track to meet your objectives is truly a lost opportunity.
For more information about how you can schedule your very own coaching session, call David Fabian at 800.391.1118, or e-mail him.
Blogs Away: A Fabian Aural & Visual Fixation 9
Want to hear my latest rant about the state of the financial markets? Well, listening and watching now is as easy as a mouse click.
To listen to the audio blog, simply click here.
Not satisfied by just listening? Would you rather watch me on YouTube?
Well, now you can. It's the latest addition to the Fabian bag of tricks: our brand new video blog.
We invite all Alert readers to check it. We assure you it's worth it.
Just click here for your Fabian aural -- and now visual fixation.
A Mouth For Wisdom
No comprehension to fail
I vacuum the wind for my sail
Can't be the rest let others waste my time
Owning success is the bottom line—Pantera, "Mouth For War"
It's not often that I quote a hard rock band's lyrics in the Alert, but when I came across these lyrics I had to let you all in on them. The way I see it, the rough-and-tumble, in-your-face attitude displayed in this song is something all of us need from time to time. Having the will not to fail and owning success are two keys to a healthy, happy life. So go out there and vacuum the wind for your sail -- and don't let anybody get in your way.
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.