Stocks near meltdown? 3 picks for a bear market
One indicator is pointing to a crash. Here are some funds that could help investors protect themselves.
What do this market and a fictional diner have in common?
Have you ever watched Monty Python's movie "The Meaning of Life"? For those who skipped on this nonsensical British humor film, one scene depicts an absurdly overweight man, Mr. Creosote, sitting in a restaurant gorging himself. Just when you think he can't eat another thing, he decides to finish off with a wafer-thin mint. As soon as he finishes eating it, he promptly explodes.
Why have I regaled you with this story?
It's because one of the most accurate indicators I follow is starting to flash a warning sign that the market may be about to do its best impression of Mr. Creosote.
The Investors Intelligence Advisors Sentiment index has skyrocketed to 51%. This means that 51% of all advisers are bullish. Let me ask you this: How many times have you seen the crowd get it right when it comes to the stock market?
Exactly! And that is why I'm worried. Readings from this level generally point to trouble ahead. So what's an investor to do? Well I'm glad you asked, because here are the three ETFS's to watch.
iShares Trust Barclays 20+ Year Treasury Bond (TLT)
During times of market crisis you want to be in bonds. Yes, I know the yields are horrible. TLT is a short-term safe haven trade in 20+ year US government bonds.
You can get long here at $119 with a $115 stop the target is $126.
PowerShares DB US Dollar Index Bullish (UUP)
When the spaghetti hits the fan the world flocks to the dollar. Use UUP to weather the coming storm. Can get long here at $22; use a $21 stop with a $23 target.
CurrencyShares Australia Dollar Trust (FXA)
Commodities will get clobbered when the market drops. Australia is hugely levered to commodities, so consider shorting their currency via the ETF FXA.
I'd wait for a move to $106 to short it, with a $107 stop and a $100 target.
As a mature investor (age 65), my advice to those who are reading this, or any other article by internet "advisors". Do yourself a HUGE favor and stop reading any of them. None of them know YOUR goals or resources. Thus, their counsel is at best, a point of view that bears astute analysis by someone that knows you. Define your goals and then spend some time to develop some basic analytical skills. Use them to craft a plan, then talk to someone who won't try to sell you a pat program to get rich for retirement. YOU make the decisions and stay on course, be patient, and responsible choices will payoff with satisfying results.
Look if it's all going to come crashing down - Just where would you put your money? I would argue that stocks are the safest place for money to be. Unless society quits functioning altogether ( the odds are a Trillion to one that it will happen) then the great companies I've invested in will continue to sell their goods and services and evetually the prices will adjust to the situation.
Invest in great Dividend Companies - Sit back and relax ! So simple even the idiot that wrote this article can do it !
Should we pay much attention to an author who uses the term "crash" and who is also the editor of ETFWarrior.com?
I have been a tax accountant since 1973 and have advocated a national sales tax, harder to cheat and trust me folks it is the poor that abuse our current system far more than the rich, but if people seem to think we are doomed in the stock market. why not get into annuities and find out how safe they can be??
I think I will keep my Chevron stock all the way to the bitter end!
The debt ceiling debate and thus inaction in mid-February will create a major upheaval in the market like we've not seen since the Fall of 2008.
Once congresss elects to do nothing once again and Standard and Poor's lower's the US credit rating....all bets are off. I see a market decline of over 1,000 points over a two week period in February.
i'll be in cash....waiting for a great buy opportunity!
Anyone watching the unemployment rate, not the 7.8 % but all those not being captured in the official published numbers can predict storm clouds ahead. New layoffs on a grand scale are announced daily and cuts in working hours reching epic levels maked anyone as accurate of a forecaster as we see in the media.
With over 350,000 new unemployment claims announced to day, the mainstream media was filled with terms like progress and stability. IFANYONE IS BUYING THIS PROPOGANDA CAMPAIGN THEY ARE EITHER INCREDIBLY STUPID OR CLINGING TO THE FANTASY THAT THE MESSIAH HAS ARRIVED. This is the same media that when 150,000 new jobs are created thay tout the phrase over and over that we are headed in the right direction.
No one knows for sure but a low grade moron taking time to connect a few dots should be scared silly.
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Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
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