Market outlook for March 6 and the week ahead
Friends, the more we think things couldn't get worse they do. Today the Dow hit a new low closing at 6,594 and the S&P 500 closed at 682. I have been looking at where we are and the mood of Wall Street and Main Street. Too much bad news surrounding the banks and the entire banking system. There are many stories I could place in this post but all it would do is to scare you even more than you already are. If we were united to overcome these problems I would feel better but unfortunately we continue to be divided by the Republicans wanting to see President Obama and his Administration fail. The problem with that approach is that it is taking down all of America at the same time.
I am no prophet and I can't really predict what will happen here. I still have a view that for every reaction there is an equal and opposite reaction. I believe in a world of abundance when others see scarcity, hope when others see despair. Think for a moment how must those who lived through the Great Depression were feeling for a number of years. It didn't affect everyone but enough so that you couldn't hide from it. Here we are facing an environment where assets are dropping at an alarming rate. There is one way to stop it if you are invested in stocks; sell all of them. You may have lost any chance to regain losses but you will preserve what you currently have. If you do that, my belief is that you are exchanging fear for the illusion of comfort as you will have dollars that are depreciating in value and that is nothing you can do anything about. You could convert your cash into precious metals like Gold or Silver, but have you ever tried to buy groceries with them?
No my friends, I think you need to have enough cash to live for at least 6 months to a year and you should weather this downturn. If you don't do your best to accumulate it through working more hours if possible, getting a second job part time or selling some assets. We will rebound, but when we do, many will be skeptics and will watch the markets rise while staying in cash. If you own some stocks and the market does rise, you should benefit. It will turn when some larger investors believe the market is really going up and greed will drive it further.
If the stress of the markets is getting to you, don't look at it for a while. Take a break from watching it, go on a short trip, do something good for yourself and settle down. I wish you the best.
UPDATE 5:30am PST March 6th
Jobs report came out a minute ago. First remember that this is a look backwards over the past month and doesn't necessarily predict the future. So the Unemployment rate for February was 8.1% versus 7.6% for January. February Non Farm Payroll was down 651,000 jobs. Previous months Non Farm payrolls were revised downward. Worst data since 1982.
I am no prophet and I can't really predict what will happen here. I still have a view that for every reaction there is an equal and opposite reaction. I believe in a world of abundance when others see scarcity, hope when others see despair. Think for a moment how must those who lived through the Great Depression were feeling for a number of years. It didn't affect everyone but enough so that you couldn't hide from it. Here we are facing an environment where assets are dropping at an alarming rate. There is one way to stop it if you are invested in stocks; sell all of them. You may have lost any chance to regain losses but you will preserve what you currently have. If you do that, my belief is that you are exchanging fear for the illusion of comfort as you will have dollars that are depreciating in value and that is nothing you can do anything about. You could convert your cash into precious metals like Gold or Silver, but have you ever tried to buy groceries with them?
No my friends, I think you need to have enough cash to live for at least 6 months to a year and you should weather this downturn. If you don't do your best to accumulate it through working more hours if possible, getting a second job part time or selling some assets. We will rebound, but when we do, many will be skeptics and will watch the markets rise while staying in cash. If you own some stocks and the market does rise, you should benefit. It will turn when some larger investors believe the market is really going up and greed will drive it further.
If the stress of the markets is getting to you, don't look at it for a while. Take a break from watching it, go on a short trip, do something good for yourself and settle down. I wish you the best.
UPDATE 5:30am PST March 6th
Jobs report came out a minute ago. First remember that this is a look backwards over the past month and doesn't necessarily predict the future. So the Unemployment rate for February was 8.1% versus 7.6% for January. February Non Farm Payroll was down 651,000 jobs. Previous months Non Farm payrolls were revised downward. Worst data since 1982.
Labels: 6 months of living expenses, Banking, banking system, cash, Dow, market outlook, President Obama, SP500, Unemployment rate
posted by Charles Amico at 4:51 PM
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