Condition of the market

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Mar 14, 2007 5:38 am

Typically, I am not a fan of market timing strategies at all. I guess even though I am very young, I am very old school when it comes to that. All I usually think I know is that after 10-20 years of being diversified in the market, you're going to enjoy a reasonable average annual rate of return (8-11%).


But that's not my point here. Does anybody else get the impression that we're about to head into a period of recession and have the market continue to drop (or at least stay stagnant for the next couple of years)? Normally, as I sort of alluded to before, I don't really pay much attention to what the talking heads are saying. But all of the talk about what's going on with subprime lenders and its effect on the housing market has really caught my attention. Could this really suppress the stock market for the next few years?

Mar 14, 2007 8:23 am

I think we have some "pay the piper" times ahead for all of the credit cards which have been issued.



Mar 14, 2007 9:59 am

yes, the mortgage debt bubble is imploding. a client told me that in knoxville TN there are 500 houses for sale above 500k and one sold last week. in virginia beach, where i am, tax assesments are up 20% from last year and  houses are not selling. Projects are half complete and prices have dropped 100k on a 500k house. which local banks are going to eat these projects when the developers walk away. I see people with 600k mortgages on houses that they could not sell for 500k. maybe this is just local but this seems to be more of a nationwide problem. This does not even count credit card debt. as I have said in the past, type in "mortgae dent bubble" in google news and read the potential horror. somewhere between that and just the subprime blowing up is probably the reality. My dad always told me that one day you have to pay back what you borrow... They were right and this generation is wrong

Mar 14, 2007 11:16 am

Our job is to not share the fears and emotions that drive our client's actions. I put talk of a "mortgage debt bubble" in that category.

Mar 14, 2007 11:48 am

Status Bear Alert


Learn this chart, it’s not a science, but an indicator that will make life soo much easier for you.   If you don’t believe me, backtest it.  Just google the bullish percent NYSE index and find a book about it. It will aid you forever.  It will be much quiter and take alot of the emotion out of this business.


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This leads me to unfortunately bring in Jones. I am a former Jonsee.  My experience was kind of like the movie “The Island” with Ewan McGregor and Hottie Scarlett Johansson.


 


This is not a bash, but to my experience the truth, you will not get support if you use technical analysis. Compliance will not know what you are referring to so they axe it. Anyway in the movie they lived in a fake world, kind of like Jim Carry in the “Truman Story”  They were born and bred to just be, no more. Oh it works, just methodically turn to page 15 in the <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />ICA guide “See Mr Jones we can invest at anytime and win!  That’s why if you have the money available buy it today”.  Does this work sure it does. Well, I forgot it does’t always work …“Voyager”  To some you new Jonsees Voyager stayed on the buy/preferred list until it landed next to the Titanic.  


 


Anyway learn the other page that being the technical side. We understand Fundamental analysis, it’s easy to hear Alan tell you to buy JNJ.  Just remember Fundamentals give us the the list, Technical Analysis tells use when to buy and sell.


Mar 14, 2007 11:51 am

First time I've heard the Truman analogy.  Pretty good one!

Mar 14, 2007 1:08 pm

Wow...wish I would have thought of the Truman analogy.  I will do better! 

Mar 14, 2007 2:29 pm

Here's what I believe will happen based on my research:


1-The market will pull back and take most of the recent gains with it.


2-We'll see market highs that were completely unexpected.


3-The market will remain flat for an extended period.


The only thing I'm still unsure about is the order it will happen...

Mar 14, 2007 3:28 pm

Now more than ever, its good to remind our clients about their time horizon's. This market environment presents opportunities. I have been counseling some of my clients that nothing in their situation/objective,etc has changed, and that they have monies in capable managers that historically have taken advantage of these downtuns in the markets.


My book is composed primarily of retirement accounts being managed for people with average retirement dates of 6-10 years away. Their time horizon allows them to weather these types of (in my opinion) short term blips...


When put into the proper framework, these days dont mean much in the grand scheme of things....

Mar 14, 2007 6:25 pm

A couple signs the top is in and we are heading lower:


1)  "Fast Money" on CNBC.  Trading gurus with he most perfect white teeth, telling its viewers how to make "fast money" in and out of U.S. equities.  They make it seem so easy, and they have all the answers.  Much better than Cramer though...


2)  CNBC Million Dollar challenge.  Contest rules are you can only go long U.S. equities with market cap of greater than 500MM.  LOL


3)  UBS and BSC upgrades of NEW.  Same old, same old dirty tricks...This time they telling us to buy companies that are built on a deck of cards...versus sales growth of Internet gear.  To me this recent monkey business seems a little more sinister and at least incompetence at the highest level.


4)  A certain poster on here who happens to be a CFP with Dow 13,000  as his signature.  Hasn't posted much lately....



Mar 14, 2007 6:33 pm

I have been busy...

Mar 14, 2007 6:36 pm

Oh yeah, I stand by my call Dow 13,000, I didn't say it would happen today but it will and very soon in my opinion.

Mar 14, 2007 6:42 pm

LOL OK.....Sorry I bet you've been busy..


Congrats on finishing the day in 12,000s versus the 11,000s at lunchtime.  Care to give us a range of when we'll see 13,000?


This year?  This decade etc...?

Mar 14, 2007 7:06 pm

Bring on the volatility.  I'll say Dow 13,000 by September and Texas A&M to win it all.  Wisconsin doesn't even escape the 2nd round.

Mar 14, 2007 7:58 pm

Not a bad call Indy, although I would guess sometime in Nov. you rookies better get bullish, you need to stay positive in the light of all this negativity. If you're clients are freaking out already you placed them in investments that are to risky for their risk tolerance, you haven't seen nothing yet.



I love that the market is volatile, it makes my job easier. I have been busy redoing a few rooms in my house....





Mar 14, 2007 8:42 pm

"and Texas A&M to win it all."
Attta boy Indyone!

Mar 14, 2007 8:58 pm

UCONN in 2009. This years crop of talented freshman and soph's reminds me of the '97 team who were young (Richard Hamilton, Kevin Freeman, Jake Voskuhl, Khalid El Amin, etc) and struggled into the NIT that year. Two years later, they dispatched of Duke and cut the nets down... THere is a pattern going on here. National Champs in 1999, again in 2004, and in... 2009...


I know... I am pathetic... UCONN will be sitting home from here on out and I hope it is pissing them off as they watch the games unfold...

Mar 14, 2007 9:12 pm

I think that advisors that ignore market cycles and tell there clients that everything will be fine and not to worry are doing a severe injustice to them.  it took clients six years to make back what they lost in the tech bubble and many advisors and clients alike just buried there heads in the sand.  Newsflash many of your babyboomer clients an't afford to go through another wreck like we just came out of. 


Stop following the advice of your b'd's and invesmtment sponsors who's life depends on you keeping your clients money in the market. 


Mar 14, 2007 9:36 pm
OhioAdvisor:

I think that advisors that ignore market cycles and tell there clients that everything will be fine and not to worry are doing a severe injustice to them. it took clients six years to make back what they lost in the tech bubble and many advisors and clients alike just buried there heads in the sand. Newsflash many of your babyboomer clients an't afford to go through another wreck like we just came out of.



Stop following the advice of your b'd's and invesmtment sponsors who's life depends on you keeping your clients money in the market.







Spoken like a true rookie! Most of my clients were down for 1 year to 2 years and 2003 put them in the black, diversify diversify diversify

Mar 14, 2007 9:46 pm

I think that advisors that ignore market cycles and tell there clients that everything will be fine and not to worry are doing a severe injustice to them.  it took clients six years to make back what they lost in the tech bubble and many advisors and clients alike just buried there heads in the sand.  Newsflash many of your babyboomer clients an't afford to go through another wreck like we just came out of. 


Stop following the advice of your b'd's and invesmtment sponsors who's life depends on you keeping your clients money in the market"


"Enlighten us. What strategies are you employing? How are you handling your clients phone calls?