If you are just starting out your investing career what better time to get started than in a turbulent market that we face right now. What we are witnessing will be written in economic and history books years from now. Oil just peaked again at $146, jobs are declining at a decent clip (6 straight months), the average consumer has huge amounts of debt, mortgages are foreclosing at alarming amounts, peoples income (real wages) are not increasing, consumer confidence is at a 28 year low and inflation is causing prices across the board to inch higher.
Things are so bad tough that politicians are even talking about a second economic stimulus package being give to consumers!!! Now I won't complain about getting another 600 dollars but lets try to chip at the issues that will reverse this downtrend. I won't get into policies that our government and Federal Reserve should take to turn us around but something will need to be done.
Until then I hope you are following our recommendations and putting yourself in a position to be nimble and quick to change your strategy. It's time to get tight like Phil Ivey, a good poker play would.
URB Recommendations:
~ Rebalance your 401K to a more defensive strategy. This would be ONLY where you have existing gains, and you should if you have been listening to my strategy of overweighting your 401K plan towards international and emerging market stocks in your 401K. Take those gains, ALL of it, and move into the safest but highest yielding plan. For me, I was able to move my old 401K plan into a Money Market account. And for my IRA plan, I was able to find a PERFECT fund called the Treasury Inflation Protection Fund (aka:TIPS) which take your basic money market rate and protects you as inflation creeps in by increasing the yield at the rate of inflation.
How to play the market during these times, turn defensive:
~ Big Pharmaceuticals
Some experts say big pharma like Forest Labs and Schering Plough are great defensive plays but I am not very good at evaluating big drug companies. The logic makes sense that you still have to buy drugs, but I not one that visits the pharmacy much so I don't know if the average person skips picking up their meds during tough times.
~ I recommend oil, natural gas, gold, steel, and select technology plays.
BUY Enterprise Product Partners (EPD) @29.05 or below...it even hit 28.76 today. I am also slightly bullish on pipeline companies. A few have surfaced on my screening and this sector may be signaling a timely opportunity to buy. I like Enterprise Product Partners (EPD) and Boardwalk Pipelines (BWP).
BUY or reBUY AK STEEL (AKS) @ 54 because steel is strong and their latest report on passing on big surcharges or fees to their customers is a good thing because it means that they are not footing the bill, although it could scale back demand.
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