Ultimately, no matter the market sentiment on any given day, the goal of every trader or investor is to make money, right? Okay, that is a statement of the obvious, but what we have in this current market environment are more than a few folks suggesting that going to cash is the only sensible thing to do in this market. For this reason, the following advice is advice to consider.
- It’s important you don’t get caught up in all of the news and hype that surrounds every markets’ move, because the next day, depending on what the markets do, the media is very reactive in nature. That’s what they do, and they do it well. They will always have a reason after the fact why the markets did what they did, and that does you no good whatsoever. What does you more good than anything is understanding all of the logical possibilities of what should happen going forward.
The letter and spirit of the advice above is right on. Making your money work is about action. What I just wrote reminds me of a billboard I saw today when driving around Utah. It said, “The only way to remove doubt is through action.”
When I, and others, suggested some two years ago that the financial sector was one place to make your money work, did you get caught up in all of the news and hype and not act? Last summer, during the annual market swoon, when I, and others, suggested you turn your attention to the European and Asian markets, did you act? If not, was it because you did not understand that the media is very reactive in nature, so it is not, by its very nature, a leading indicator?
The piece in the above advice that is most important to pay attention to now is this –
- What does you more good than anything is understanding all of the logical possibilities of what should happen going forward.
I have written ad nauseum about the mid- and longer-term view of the market – I am bullish as can be. Corrections will come and go, but moving forward, 2013 will be on average another good year for the US market, and the European and Asian markets will follow suit. It is not too late to get exposure to all markets broadly or specifically, but just to be sure you get the picture about the markets and the potential for the global economy consider the following question.
- What if Japan’s initiative to kick start inflation actually works?
Yup, I always write about Europe and China, as do most pundits, but what about Japan? After all, Japan is still the third largest economy in the world, if one rates by country alone. In fact, it is so close to China (#2), that if the Japanese economy took off again, it could become #2, again.
- Any growth in Japan could be a major boost to the world’s economy. In looking at the Nikkei and Japanese ADRs like Sony (SNE) and Toyota (TM), it’s evident that Premier Abe’s fight against deflation is starting to work.
Imagine for a moment that Japan, Europe, China, and the US all begin to engage their wheels simultaneously?Okay, so let’s step away from the fantastic and just stick with what is more probable – China and the US will keep moving forward economically and Europe and Japan will begin to turn around. In this coming year, this is highly likely.
Recently, I have hammered the advice from more than a few folks that going to cash is a bad idea. Sure, I can be as wrong as the best and worst of those who write about the markets, but on the broad issue of the market direction for the past four years, I have been on target, and I think I am on target now for 2013. But, don’t just take my thinking on this. Do your own work and look at all the data out there and then ask yourself, “Is the market going to tank, or is it just going to rebalance on the way up? If you conclude that the doom and gloom crowd is correct, fine, but then consider the flowing before you pack it in …
- For the past 4 years now the general public has missed huge gains in the market because of their own bias clouding objective thinking and because of the excessive fear spread by bloggers and the media alike.
Yup, consider it all and make a choice because the worst that you can do is have doubt. Action is what gets the job done.
Trade in the day; Invest in your life …
