Warning: The Annual Summer US Stock Markets Selloff Is Coming!

US Stock Markets Update: Question #1 What has changed about the US and world economy two months ago? Answer: Almost Nothing Question #2 Did anything change in China? Answer: No Question #3: Is the price for a barrel of oil still a lot lower than a year ago? Answer: Yes Question #4 Is Greece still Continue Reading »

Amazing Facts on The Major Credit Card Companies and Amazon.com: As You Shop This Holiday Season 2015

As you spend money this month on holiday shopping, here are some amazing facts on the most popular credit and debit cards that I am 99.99% sure are in your, pockets, purses, wallets and handbags: Bonus Amazon.com

Holiday Shopping 2015

When to Sell Stock(s)

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Over the years, as soon as people meet me or learn that I am a long time experienced investor, they start bragging about a stock that they have that as done very well because it has increased in value (Very few talk about the many that they have lost money on).

And I always ask, “So, did you sell enough shares to at least prevent you from losing your original investment when the stock goes back down?”

Always with a puzzled look on their faces, they reply, “You mean take some profit?” No, I reply, you always want to leave your profit in the market. What you want to protect is your principal, your hard-earned money, your original investment. By taking out you original investments, you can sit back and not have to worry about the wild emotionally driven up-and-down swings in the stock markets. Even better, if the stock you own pays at least a quarterly dividend, your profit can be keep growing over time collecting reinvest dividends.

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The US Economy Always Goes Through Cycles, Good and Bad!

Guess which one is coming up?

Recession 1

I had a dream last night that I was temporarily lost in the woods where it had freshly snowed. Actually, it was more like a nightmare since; I truly hate snow, ice and cold weather. Then, this morning I was outside in my garden and, even though I live in sunny South Florida, I noticed that the tree squirrels were very busy preparing for what passes for winter down here. I watched them run back and forth for a while; then I thought of something;

We should enjoy living in the moment, but we must also prepare for the future.

I have noticed that even very wealthy people save for “rainy days.”

The American economy has done well since the last recession in 2008; it has had over six years of continuous growth. Yes, this is good news, but the bad news is that the American economy goes through cycles and we are due for a correction.

In 1995 through 1999, we had an economic boom due to technology growth, partly due to the fear we had about the doom & gloom of the impending Y2K.

Remember, we were brainwashed to believe that we had to upgrade our computers because they were only programmed to go up to the year 1999 and not 2000. So, on Jan 1, 2000, every business and every home had new computers, new software, new applications–and in the first quarter of 2000, there was almost zero sales activity at computer stores and outlets. Hello, tech-bust.

2008 housing bubble

With a lot of Government spending, we climbed out of that recession only to build another bubble; The housing bubble!   From 2004 -2007 we saw the value of real estate go through the roof only to see another bubble burst in 2008. Again, the US Government intervened with massive spending, and from 2009 through now in 2015. We steadily recovered due to very low interest rates and very cheap loans.

The oil sector in the USA used this cheap money to put in massive infrastructures and used new technology to pull huge amounts of oil and natural gas out of the ground. This put OPEC in a wringer as they had legitimate competition, which drove prices down. The great news is that we have an oversupply of oil and natural gas. The bad news is that the abundance of oil sends the oil prices crashing over 65 percent from its high in 2008.

oil bubble

With infrastructures in place and oil prices so low, the huge spending also has come to a screeching halt, and we can clearly see that the US economy is now starting to slow down. What does all this mean? Very clearly it means that whenever spending stops, an economy will again head for a recession.

What should you do? Well, just like the tree squirrels in South Florida and very busy ones in the northern parts of America getting ready for the winter months ahead, you need to start planning for some rocky times ahead. How do you do that?

Start saving at least 20 percent of your income. Cutback and only buy things you do not really need. Maybe look for a more secure job.

Pay off as many of your loans as you can, especially the ones where you cannot deduct the interest rate on your taxes. Think of all the things you wish you had done before the last recession and do them now.

Yes, the recession may not come in the next, month, next year, two years or five, but I know one thing for sure–it will come.

 

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The Next Stock Market Crash Is Less Than Fifteen Minutes Away

Now that unintelligent investors are panicking about the Greece Debt Crisis, which have been staring them in the face for more than a year now, I think it is a good time to repost this blog.  Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very Continue Reading »