My March Rage Gauge is in, and it feels like the calm before the storm. Does that mean the market will have a huge downward correction this year? Like I’ve written to you in the past, I’m not in the prediction business. Because for you to be a great investor, you need to put together multiple seasons of investing and then maybe you’ll be able to look back and say: “Well, I wouldn’t want to do that again, but we made it.” Let me explain. All of us have a pretty good feel for what’s going on today. Interest rates aren’t moving, the Trump economy is OK (It could be great again if the … [Read more...]

When the S&P 500 lost 9 percent in December it marked the worst December since the Great Depression year of 1931 when the index was down 14.5%. For all of 2018, the S&P 500 lost 6.2% compared to a loss of 47% in 1931. Now let’s not forget what the carnage looked like from the beginning of the Great Depression, signaled by the crash of Oct. 29, 1929, to its end in June 1932. The S&P 500 dropped 86 percent in less than three years, and did not regain its previous peak until 1954. America has already had two nasty peak to troughs this century, with the tech and banking busts of … [Read more...]

Don’t look now but Vanguard GNMA is up close to 2% over the last four weeks and is even on the year. Remember, half the time you’re going to hate GNMA and half the time you’re going to love it. As the market has struggled, GNMA has performed well. The stock market has been volatile, and my RAGE Gauge is signalling increased risk in America. With an investment like GNMA, which has had no big down years in the last 15, you may be able to create some counterbalancing in your portfolio. This month I am increasing the RAGE Gauge from 80 to 100 to reflect the increased risk in the economy. Now … [Read more...]

My early October readings are in, and clearly Americans are back to work thanks to the Trump Economic Revolution. And as interest rates rise, retired and soon to be retired investors can rejoice in the long-awaited Interest Rate Revolution. CNBC explained the good news for America's economy here: The number of Americans filing for unemployment benefits fell to a near 49-year low last week, pointing to sustained labor market strength, which should continue to underpin economic growth. The labor market, which is viewed as being near or at full employment, is steadily boosting wage … [Read more...]

September's RAGE Gauge was little changed from the previous month. Fast forward for a moment and imagine where interest rates will be one year from today. Because yesterday, the Federal Reserve increased rates for the third time this year and the eighth since late 2015 and has basically said expect much more to come. There is a Titanic like shift underway with bonds. Wait until corporate bond yields are at a level where finally you won’t need as much of the fois gras stock market, which has been force fed by the likes of Ben Bernanke et al. Imagine the competition stocks will face then, and … [Read more...]

My overall trend reading was down from July. Investors are feeling a little too comfortable in this stock market. Yes, the economy looks good, but this bull market is long in the tooth. Now would be an excellent time to look for defensive stocks for your portfolio. “Valuation concerns have already crept into the market, some investors said, as defensive stocks that tend to post lower growth than companies like Amazon and Facebook have outperformed,” reports the WSJ. “The top five performing S&P 500 sectors the past three months are all defensive, Bank of America Merrill Lynch said in a … [Read more...]

Over the last month, Americans’ perception of risk hasn’t changed much. One factor of their perceived risk is at a very low level though, their dissatisfaction with their country. For over a decade now Gallup’s poll of American dissatisfaction with the country has been 61% or higher. Not since August of 2005 have only 60% of Americans been dissatisfied. That changed with this month’s survey results. For the first time in 13 years, dissatisfaction dropped down to 60%. Satisfaction is also the highest it has been since 2005, at 38%. Not since September of 2005 have Americans been so … [Read more...]

We can thank President Trump for unleashing the animal spirits that have been key to this economic resurgence: Business Owners of America Unite! And we may be seeing just the beginning of the economic growth to come. But, from an investment standpoint, especially for those in or near retirement, it continues to be a sticky situation. Do you put more money into a bull market that is long in the tooth only to have it ripped in two with a nasty correction? Or, do you take the high road and suffer along with two percent rates, gritting your teeth, as your nephew talks about cryptos? Continue … [Read more...]

Sell in May? Not if you have a plan you don’t. Successful investing requires that you have a plan and the patience to stick to it. Being paid to be in the market through dividends from stocks, and interest from bonds, makes the waiting all the more palatable. Risk continues to be high. Stocks continue to feel like a popularity contest, especially the FAANGs. We know how that story ends. … [Read more...]

When you’re in the gun business is there a better salesman than former Supreme Court Justice John Paul Stevens? With Stevens talking about repealing the Second Amendment, it’s no surprise background checks, a precursor to gun sales are, are up. The risk trend in my RAGE Gauge analysis is up too across the board, except for one metric, unemployment. Thank you, Mr. Trump. Continue to invest with caution. By the way, did you see the unemployment rate numbers for Elkhart-Goshen, Indiana? It was 16.7% in October 2009 and is around 2.7% today. The RV business is humming. … [Read more...]