Will the market hit new heights in 2011?
WWW.Waltonsun.com
January 15, 2011
Last Dec. 30, I am certain our clients were thrilled to receive an email blast linked to an Investment News column, ?Dow to Hit All-time High Next Year? Odds Look Good.?
Marketing expert Laurel Abbe (www. laurelabbe.com) dryly noted my e-mail blasts were dull, so I tried to jazz things up. It does not matter which measure one chooses ? Dow Jones Industrial Average, S&P 500 or Russell 3000 ? there will be a new stock market high, albeit, eventually. I don?t know exactly when to pop champagne corks, but I do know the new market high will occur many moons before vacant lots in my stomping ground (Lakeside at Blue Mountain) eclipse their previous high.
Does this mean you should call your broker tomorrow and load up on stocks?
Negative, that would be foolish. Have an investment strategy and stick with it. According to Jeff Hirsch of ?Stock Trader?s Almanac?, the stock market has not had a negative third year of a presidential term since 1939, however, that is merely a data-point. Check out the column. Just Google ?Dow to set new high investment news,? the link should be up. History buffs will catch Hirsch?s faux pas. His claim that the Dow Jones Industrial Average goes back to the Andrew Jackson administration (1833) is simply wrong. Charles Dow began his now-famous index in 1896.
What I do know, is the market recently polished off the best December since 2003 and is up more than 70 percent from March 2009. In 2010, there was no double-dip recession along with nada deflation (except for over-priced homes). The recovery will continue its sluggish path until, drumroll please, businesses see sustained profit.
One headwind facing the economy, high unemployment, could be persistent. One and a half million construction jobs were lost in the Great Recession, and until new homes start springing up, those jobs aren?t coming back. Also, more than 2 million manufacturing jobs were lost. In a refrain going back to the 1970s, each recession has left more workers in these industries unemployed ? sometimes permanently. The socio-economic class that is growing most rapidly has two characteristics, poor and lily-white.
Another storm cloud is ongoing on the horizon, never-ending political uncertainty.
On NPR, the newly elected Senator from Utah, Mike Lee, stated that, baring successful passage of a balanced budget amendment, he would vote against raising the debt ceiling. Senators Graham and Demint are linking their opposition to increasing the debt ceiling with dramatic changes in Social Security. Let?s hope this prattle is little more than political posturing. Failure to raise the debt ceiling means U.S. Treasury Bonds, Bills and Notes lose credence as the strongest currency on the planet. More importantly, brave Americans are fighting two wars. Plus, Social Security is currently operating in the black. Failure to raise the debt ceiling could usher a repeat of 1931, Herbert Hoover?s third year, when the Dow lost more than 50 percent.
Markets fluctuate, sometimes sharply, and they often climb a mountain of fear. Investment plans don?t fail, rather people do. Folks either take too much risk during boom times or abandon their plan during troubled times.
Will the market go up next year? Maybe, maybe not. There are worse things than a down market. At my house, our best friend died last year. 2011 will be better, stock market up or down.
Buz Livingston is a certified financial planner. He operates Livingston Financial Planning Inc. focusing on hourly financial planning and investment management. Contact him directly at 850-267-1068 or at buz@ LivingstonFinancial.net? .
BUZ LIVINGSTON
Just Plain Talk
WWW.Waltonsun.com
January 15, 2011
Last Dec. 30, I am certain our clients were thrilled to receive an email blast linked to an Investment News column, ?Dow to Hit All-time High Next Year? Odds Look Good.?
Marketing expert Laurel Abbe (www. laurelabbe.com) dryly noted my e-mail blasts were dull, so I tried to jazz things up. It does not matter which measure one chooses ? Dow Jones Industrial Average, S&P 500 or Russell 3000 ? there will be a new stock market high, albeit, eventually. I don?t know exactly when to pop champagne corks, but I do know the new market high will occur many moons before vacant lots in my stomping ground (Lakeside at Blue Mountain) eclipse their previous high.
Does this mean you should call your broker tomorrow and load up on stocks?
Negative, that would be foolish. Have an investment strategy and stick with it. According to Jeff Hirsch of ?Stock Trader?s Almanac?, the stock market has not had a negative third year of a presidential term since 1939, however, that is merely a data-point. Check out the column. Just Google ?Dow to set new high investment news,? the link should be up. History buffs will catch Hirsch?s faux pas. His claim that the Dow Jones Industrial Average goes back to the Andrew Jackson administration (1833) is simply wrong. Charles Dow began his now-famous index in 1896.
What I do know, is the market recently polished off the best December since 2003 and is up more than 70 percent from March 2009. In 2010, there was no double-dip recession along with nada deflation (except for over-priced homes). The recovery will continue its sluggish path until, drumroll please, businesses see sustained profit.
One headwind facing the economy, high unemployment, could be persistent. One and a half million construction jobs were lost in the Great Recession, and until new homes start springing up, those jobs aren?t coming back. Also, more than 2 million manufacturing jobs were lost. In a refrain going back to the 1970s, each recession has left more workers in these industries unemployed ? sometimes permanently. The socio-economic class that is growing most rapidly has two characteristics, poor and lily-white.
Another storm cloud is ongoing on the horizon, never-ending political uncertainty.
On NPR, the newly elected Senator from Utah, Mike Lee, stated that, baring successful passage of a balanced budget amendment, he would vote against raising the debt ceiling. Senators Graham and Demint are linking their opposition to increasing the debt ceiling with dramatic changes in Social Security. Let?s hope this prattle is little more than political posturing. Failure to raise the debt ceiling means U.S. Treasury Bonds, Bills and Notes lose credence as the strongest currency on the planet. More importantly, brave Americans are fighting two wars. Plus, Social Security is currently operating in the black. Failure to raise the debt ceiling could usher a repeat of 1931, Herbert Hoover?s third year, when the Dow lost more than 50 percent.
Markets fluctuate, sometimes sharply, and they often climb a mountain of fear. Investment plans don?t fail, rather people do. Folks either take too much risk during boom times or abandon their plan during troubled times.
Will the market go up next year? Maybe, maybe not. There are worse things than a down market. At my house, our best friend died last year. 2011 will be better, stock market up or down.
Buz Livingston is a certified financial planner. He operates Livingston Financial Planning Inc. focusing on hourly financial planning and investment management. Contact him directly at 850-267-1068 or at buz@ LivingstonFinancial.net? .
BUZ LIVINGSTON
Just Plain Talk