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  • Institutions Already Shifting Their Investments; Should Investors Follow Suit?

    Recently, I've issued several warnings in these pages for investors who are heavily involved in fixed-income assets. As I've mentioned over the past couple of months, I think the worst investment for investors to make is to put a lot of money into long-term Treasury bonds and notes.

    This is because the unprecedented level of quantitative easing by the Federal Reserve will not go on forever. Once this shift occurs-the Federal Reserve beginning to reduce its aggressive quantitative easing program by decreasing monthly asset purchases-I believe it will hit the bond market quite hard.

    I am not alone in this analysis, as recently the Federal Reserve Bank of Dallas President, Richard Fisher, stated that he too believes the multi-decade bull run in the bond market is over. (Source: Ito, A., et al., "Fed's Fisher Urges QE Reduction Seeing End to Bond Rally," Bloomberg, June 5, 2013.)

    Continue Reading: Institutions Already Shifting Their Investments; Should Investors Follow Suit?

    Jun 07 3:00 AM | Link | Comment!
  • Investors Beware: Underlying Weakness In Stock Market

    The Dow Jones Industrial Average (DJIA) is down 2.3% from its record-high on May 28, but just like the S&P 500, the DJIA appears to be flashing some fatigue on the charts, suggesting some stock market risk and possible market correction.

    Now, this may only be a temporary pause, or it could be foreshadowing some upcoming selling, stock market risk, or a potential buying opportunity.

    The chart featured below of the DJIA (shown in the red candlesticks) and the Dow Jones Transportation Index (in green) shows a decline in both (marked by the larger purple oval). This may indicate that something bigger is coming, or, as the case was in mid-April (as indicated by the smaller purple oval), we may just be seeing a market adjustment prior to another rally.

    Continue Reading: Investors Beware: Underlying Weakness In Stock Market

    Jun 06 4:38 AM | Link | Comment!
  • Economic Growth Setting Up To Disappoint Investors?

    Two of the most frustrating aspects over the last few years have been the anemic level of economic growth and the below optimal amount of job creation.

    Even though the stock market is hitting all-time highs, millions of people do not feel wealthier because of the uncertainty regarding job creation. Even for those who might have a job, because the employment market is so fragile, many people are afraid of losing their positions, knowing that there are millions of others who are gladly willing to take their places.

    Recent data regarding the true level of economic growth remain mixed. While there are some signs of a possible improvement, conversely, there is just as much information throwing doubts about the future levels of economic growth and job creation.

    Recently, the Institute for Supply Management (ISM) released its national Purchasing Managers' Index (PMI) for May 2013, which came in at 49%.

    Continue Reading: Economic Growth Setting Up To Disappoint Investors?

    Jun 06 4:36 AM | Link | Comment!
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