Mystery Market

Right now the market is like a victim on the tv special 48 Hours Mystery or Dateline. If you are are a bullish investor your portfolio gains are disappearing faster than Star Jones weight...I know amazing. That is why I have to say, without hesitation, that we are in the midst of an ugly recession that has many forces against it. Whether its a slumping housing market, skyrocketing oil, expensive food, vanishing jobs, or a weak dollar, we all seem to be affected in our wallets and now in our portfolio.

I haven't taken this stance in the few years that I have been investing but I am going to go on record and say "like a good poker player" you should tighten your game up right now. If you have big gains sitting out there keep a watchful eye out on those positions and look to sell to the upside. Capital on the sidelines can definitely be your friend when this all turns around. And for new stock positions or stocks that are currently trading at a loss you may want to set a floor, or stop loss, that limits your downside risk. It will all depend on how much you can stomach but I will remind you that it when you take a loss in a stock position, you actually have to gain "MORE" than your original loss to "JUST BREAK EVEN". Don't believe me run the number's...Let's say you buy a stock for $10 and it falls to $5, you just lost 50%. Now calculate how much you have to earn on $5 to get back to $10...try a 100% return!

My recommendations:

~ Take cover and move your 401K benefits to a safe investment like a money market fund or even better I found a inflation protected bond fund to hold me over until the market gains its footing

~ I believe that exposure to the commodities (oil, gas, steel) is a good hedge to the downward pressure. As you can see I have increased my tracking portfolio to see how GOLD and OIL perform during these turbulent times. 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).

~ The international and emerging markets are no longer a complete safe haven. Many countries are feeling the effects of higher prices of food and oil and are also reeling from inflation. And as international countries raise their interest rates to combat inflation...earnings may be under attack. If you have moderate gains, take profits here for safer investments.

~ Set stop losses or floor limits for new stock positions and current positions that are at a loss. It is harder to break even from deep losses