Maximizing Your IRA In A Recession

Money is tight everywhere. The First thing people do is look to curb their budget. Were is the money going. Grocery bill, telephone bill maybe a house payment. The truth is everyone has bills. Where do we go to trim our budget? The reality is most people go to there IRA contributions to try and save money. Is this a good practice? Are you saving money? NO!! Maybe combine the number of trips to Menards or less trips to McDonalds for lunch but please don't take away from your IRA contributions. There is a rule - to maximize your earning potential your must invest in the good times and the bad times.
Why? Look how long the financial markets were in the tank before someone said "THE US ECONOMY IS IN A RECESSION" Over a year. The same is when the economy is out of a recession. You won't know until it's happened.
Lets say you invested $100 for 2 shares of mutual fund X in 2003. Each year since then you have invested $100 in mutual fund X. Over the years that $100 would only buy 1 1/2 shares. Now the market is down that yearly $100 will buy 4 shares of mutual fund X. We know mutual fund X is a four star mutual fund. We know that mutual fund X will go back up again. So why would we take away from a great investment opportunity like a recession. We can leave this recession with more shares and reap the rewards of dedication to our IRA and our retirements.
If it come down to the family eating or your IRA of course family comes first. If it comes down to a night out with the boys or a little early retirement. GOOD LUCK!

IT'S BEEN TO LONG

Sorry it's been so long, other business to attend to. What's going on with the market today? It's kind of funny, i haven't posted a article in some time. When I last did GM was the big thing in the news. What is the big headlines today? GM of course.
Well were not going to talk about them today. Today I'm going to tell you a little bit about the way the market is shaping up. If you have been keeping your eye on the news you probably noticed that the unemployment new claims has started to slow. The retail sales have had a little bit of a turn around. This recession seems to be slowing or has stalled. Why? Is it the ungodly amount of money the government is throwing around or are people starting to figure out that the news had nothing better to talk about and blew this recession out of proportion?
We should really ask ourselves how did we get in this recession. Is it the possibility that big business was driving themselves out of business by flooding the market with supply in hopes to drive smaller competitors out of business? Is it possible that we ourselves are to blame by spending beyond our means just because a bank was more than happy to keep giving us money? Maybe the government was to worried about party loyalty to worry about the state of the nations economy.
Well the answer is all of the above, and a whole lot more. These things though will help us see were the market is today. Regardless of what my opinion is on the governments blank checks they seem so happy to give out, it does have a trickle down effect. If it was me I would have let these automakers and financial institutions bite the bullet. It would have taken longer for the recession to turn around but the bale out money wouldn't have been coming out of everyones pockets.
The next thing is alot of businesses where building for comfort. What I mean by that is they put on more employees than were really needed to do the job. Now that businesses have started to trim the fat there bottom dollar is on the rise. When these companies started to trim the fat the unemployment numbers started to rise unemployed people have a hard time paying bills. This in turn ups the number of foreclosures. Which in turn digs into the pockets of the local government. Which in turn digs into the pockets of Washington. Which in turn digs into our pockets.
A big piece of the pie is the amount of house holds that were spending beyond there means. A house to big for their income and then they would tack on a few credit cards. What did they have? A life style they couldn't afford.
Now that we took a little look at what got us into the recession. We can see why we are coming out of it.The government did keep alot of people from being unemployed. These people to stay employed had to give up some of their wages.
Which helped their employer stay afloat. The fear of unemployment helped a nation look at their credit card spending. The government started to look at the credit card companies approval policy for new card applications. The credit card companies gave a brake to people who should have never have had a card in the first place.
I could go on and on and on and---Well you get the idea. This recession took years to develop and it will take years to fully recover. I'm just trying to say you can see light at the end of the tunnel.

GM? Is this the beginning of the end?

The recent news from GM leaves a person wondering if this is the beginning of the end. What if? What if GM restructures more will they be able to become profitable? What if the UAW gives up more concessions will this secure their jobs? What if GM goes into bankruptcy will this be a brighter future for GM? The truth of the matter is the only real future in the market today is that a company needs to be able to make changes fast to keep up with compitition. How does a company acheive this? Cost such as labor, material, electric, health care, pensions or 401k's are all subject to be trimmed. Companies can always hunt for cheaper materials and cheaper health care. They can also reduce additions to pensions and 401k's. Electric comes down to more energy savings and going more green for the tax deductions. That is just a rough draft of a companies finacials. I didn't get in to the advertising and compition from other companies but you get the idea. There is one thing I left out, labor. This is a touchy subject, but this is the largest cost to some companies. When all the benifits are figured in for GM employees, not just the working employees but also the retired employees. GM is the hiighest paying automotive employer in the world. Yes the world. GM still values it's employees, but at what cost? Well I guess it's time to get at the heart of this article. GM needs to go into bankruptcy just to get rid of the union. GM needs to get their employee pay and benifits in a relation closer to their non labor cost. The whole world was up in arms that the big three auto giants would go bankrupt but the truth of the matter is it's the best thing for them. For GM they would come out of bankruptcy a lean mean auto making machine. I know that would be a stock I would be adding to my portfolio.

The Man Of The People

The big news for the weekend is, GM's CEO Rick Wagner is stepping down, immediatly! This is because the White House requested it. When the goverment decides to give these companies billions of dollars I would think that it would be up to the government to decide who they want as CEO. The only reason I believe this is if the CEO that is there was being effective the company wouldn't need billions of dollors. Don't get me wrong I don't think the government should be running it, or they might need alot more than what they already got. Rick Wagner in a interview said "I'm the best thing for this company." That is the arrogance of alot of these big companies they are more than willing to go beg for money from tax payers but still think that the country needs them so bad that they can get away with what ever they want. Like the bonuses that have been given out to upper manegment so they can keep the talent there. What a bunch of bull. All of GM's problems can't be put on Rick Wagner's head. You can also include the UAW, and several suppliers who seen other suppliers going under and seen that as a perfect time to raise their production costs. Thus bleeding all the auto makers not just the big three. A final thought, GM employees said Rick wagner was a super nice guy. Being a super nice guy doesn't always get the work done.

What it Means to Buy Intelligently

There are alot of investors who want the big money right now. How do you get the big money right now? YOU DON'T. What you are saying you want is to gamble. Don't let your financial advisor or your pal from work tell you some thing is a sure thing. What will happen is you might make some money or you might lose some money. The only thing you can do to improve the winners you put in your portfolio is do the homework. You don't need a college education to be a good investor. Go down to your local library start reading some books. Try to start out with books that talk your language. A book that uses a ton of fancy terms isn't going to be any help at first. You need to get your feet wet, get comfortable with terms that are being used to describe the markets you want to start out with. I really don't like to toot any bodies horn but a author who I think is really down to earth is Wade Cook. He writes in our language, lays it out for you then works on some of the terminoligy. The nice thing is, if you are reading this, it means you have a coputer. There are thousands of sites that have free info on investing. What I've seen is the more common the idea or the more popular an action the probability of it work is more likely. Just start reading. The more you know the more ideas you have to work with. When the title of this article say "WHAT IT MEANS TO BUY INTELLIGENTLY" it means the more knowledge you have about the market, the more intelligently you can start to determine when a stock is a good buy or a mule that will give you nothing but problems. When you are ready to start using your new found knowledge and buy a stock use some of the free stock analyzing tools out there to help. You can go to google.com and type in "stock analysis+free" and that should help. Good skill not good luck.

FUNDAMENTALS

Today I want to just touch on the basics. First if we want to buy a stock for our portfolio we don't want to pay to much, right. How do we know if we are paying to much? In the market today there are alot of stocks that can be concidered bargains if wefollow a couple of steps.First we need to look at earmings. Earnings should be based on day to day business not one time sales like a sale of part of the company or something like that. You'll also want to know what past earnings have been. With past earnings it will let you see what direction the company is headed. Once we get this then we'll figure out the P/E of the stock witch is nothing more then taking the earnings divided by number of share to get earnings per share but most of this is already done so we don't have to do the math. Next we'll take the price of the stock and the earnings to find out what return we are getting from each stock. I'll pick up here tomorrow. It should be a busy week in the market this week. Lets see how it goes and maybe we can get some good buys and make ourselves some money.

Up Now Down

Looks like a lower start today.The futures are down but I was expecting it yesterday. Today the CPI [Consumer Price Index] came out it grew by 0.4% in Febuary. It's the highest in 7 months. Which at other times might seem bad, but right now it means inflationisn't taking over. Pur ORACLE on your watch list today it's sappose to come ouy with its quarterly report. For the businessman some good news airline ticket prices are down 2.8%. IBM in talks to buy SunMicro. I've said it before now is the time forbuyouts and take overs. And today AIG ceo on capitol hill. The government is trying to recoup some of the 165 million paid out in bonuses. Just something to keep your eyes on tomorrow, jobless claims report comes out. We all know how nuts the market gets with those numbers.

Can WE Have A Little Applause

That's one. The three major indicators were up for the week. The DOW finished at 7223.98 or up 9% for the week. The S+P finished at 756.65 or up 10.7% for the week. The NAS finished at 1431.50 or up 10.6% for the week. To fully understand what that means we have to look at the Dow Jones 5000. Which is nearly all stocks traded in the US. It was up 10.7% for the week. That is a value gain of 900 billion dollars. Was the over all news this week that good? The fundamentals haven't change, and it shows. The volume over all for the % change increase was weak. Until the fundamentals change, what goes up, well you know the rest. Until we start to see a good percent change in the unemployment numbers. I don't believe you'll see the market keep going up. Employment is what we need for things to really turnaround. Maybe I'm wrong. Maybe this is the turning point. In which case do we really need to use more Tarp money? I believe that we didn't need the tarp money in the first place. I believe a lot of the economy was stemmed by fear. People pulled their money out of the market, put it under their bed and just weren't spending.

A GOOD HUMP DAY

Bernie why did you do it? Bernie Madoff plead guilty, bail was revoked and he was escorted to jail. That won't get all the investors their money back. US/Mexico boarder governors are asking the president to deploy troops to help with drug violence. Lets help protect our boarders. N. Korea is about to launch a satellite into orbit. Do we believe that's what they are doing? Over seas markets were mixed today. At home we had three good days in a row. GM said it didn't need its federal loan for March. Pfizer rose 10% when they released news that their drug Sutent was successful in trials to slow cancer. Bank of America up again. That's 83% for the week. Apple closed over 96. They consumer spending report was the big motive for the markets I think. With the exception of the auto market being down, gasoline, clothing, electricity and health and personal were all up. That's two months in a row of up spending. Once people are ready to start spending that is when the market will really move not a trillion dollar stimulus package.Gold was up at 924. Oil was up at 47.03. I think we are looking at a week that will finish up barring some unforeseen disaster.

CITI's roots still intact

CitiGroup sees two months of profit, CitiGroup CEO says they are having the best quarter since 2007. That was enough to raise the markets 5.5%, the Dow up 379.44, the Nas up 89.64 and the S+P up 43.07. Is Warren Buffet right will Obama's "muddled" economy message drag markets down? Although one day is a start, I think the sentiment on the economy hasn't change. Not to spoil a good day, home builder Hovnanian Enterprises seen a 66% drop in revenue but still has enough confidence that their cash supply will hold out till 2011 that they bought back 350$ million in debt. The Employee Free Choice Act, a bill to give voting options for employees voting on getting a union, a union friendly bill, faces some hardship in the senate. The president has said he will pass it if it passes his desk. Its nice to see Federal Reserve Chairman Ben Bernanke tell it how it is. "There has to be more financial oversight and an overhaul of rules for financial systems." Bernie Madoff to plead guilty to 11 counts of securities fraud. He faces 150 years in prison. Maybe this is one of the things that wouldn't have happened if the fed and the sec would work together. The last thing is a 410$ billion dollar spending bill that passed the senate 62 to 35. That's only a budget till September. It would be nice to finish up this week. We will see.

The enviroment for growth

Drug makers Merck and Schering-Plough will combine, with Merck giving $41.1 billion in cash and stocks for Schering-Plough. I think we can expect to see alot more of buyouts and mergers over the next few months. The U.A.W. and Ford have agreed on a 2007 contract change with Ford putting in a pay freeze and benifit cuts. Out of the big three I think Ford is on its way to becoming a factor in auto industry again. Geron Corp. and Stemcell and other stemcell research companies were up in a big way today. All due to Obamas reversal of Bushs stemcell bill. Is it time to get back in the market again? For chart readers and followers, the charts are seeing 6400 as our bottom. If it's time to get back in maybe ETF's are the answer right now. You can own without the exposure. Similar to a mutual fund but can be traded daily. Some to look at are XLP invest in consumer staples like Procter and Gamble, Coke, and Pepsi or LSC elements and short commodities or TIP Barclays Tips, iShares and bonds. One last thing Rush Limbaugh like him or hate him all I know is the more people debate about him the more popular he gets. Today he was a point of discussion on Hardball. They were discussing about a article that was written about him in The New York Times. I figure if you don't like him don't make him more popular by writing about him. As of late he's been in about every paper around and I think he doesn't mind but I guess it doesn't matter to me either way.

A do over

The beginning of a new week brings antisipation to see how this market develops. Asia has oil over 46$ and I think that trend will continue here today. It is in responce to fears of OPEC cuts in production. The white house budget director say the economy is "weak". Did you see that? "weak" Where has this guy been hiding? I almost couldn't believe it when I read it. O.K> If you are looking to take a flight, Airlines are cutting prices to fill the seats. Not a bad time of year to go some place warm. Just a few stocks to watch Monday. eHealth, MAG Silver and Snap-on have all been upgraded to buy. Hope all have a good week.

The weeks out look

What kind of week did we have? Well not a very good one. The job report didn't look to great, but I guess we look better than others Germany is at 8.2%, Japan, at 12.7%, or South Korea over 20%. That doesn't make us feel better. Will our recovery be faster than other lets hope so the European stimulus plans are a 1/4 of ours. With the job report creates other problems. Right now 11% of mortgages are either delinquent or close to foreclosure and I'm sure you'll see a large number of those end up being foreclosures. Good old FannieMae though comes to the rescue. Their CEO said they would extend evictions notices on foreclosed properties. A person would think with all the money that tax payers gave to them in a bailout that maybe instead of foreclosing they probably could have suspended interest or forgone payments for a set amount of time. Now with the environment we have. Those houses will be vacant fore a while even with the extension of eviction notices. The US is still looking better than others. Another good example is Lloyds Banking Group is now majority owned by the British government and is expected to end up with about a 70% stake. Those people looking to invest next week, may I suggest buying in spurts. buy at one low and if it hits another buy there. Take advantage of the law of averages. Though I would still keep the majority of your portfolio in cash.

An investment day that makes you go WOW!

I think we'll just look at the highlights today. To start things of the Dow and the NASDAQ both down around 4% the S+P down 4.25%. Oil at 43.63 down 1.72 gold at 933.20 up 26.00. The loser list could go on all day but MS, JPM, AIG, GM, and F are the big names. I think the jewels right now are GE and WalMart. Dow down 14 of the last18 cessions. The S+P had 3/4 of stocks hit 09 lows. Tech stocks have fared well this year compared to the rest of the market down 20% compared to 40% stocks like Ciena and Adobe. I think a good addition to the portfolio is maybe more health care. Names like Pfizer, Athena health, Lab Cor and even United health. Most have strong foundations and lots of cash or new things on the way. Just a reminder 8:30 tomorrow employment report so lets keep an eye on it and maybe make some good buys on a dip or get rid of the weaker stocks on a bounce. Things are kind of crumby right now but its a traders and the long term investors market. The good news from China yesterday and the rewording of it today with GM and their news release wiped away yesterdays gains but tomorrows another day.

The big market rally

The market had a nice rally today off of the news of the China stimulus plan. Big Lots up 2.57, ADC Tel. Com. up .75, Celanese up 1.69 or 22%, Massey Energy up 9% some big movers today. When it comes to movers lets look at GE down as much as 16% today, but there was alot of insider buying. Coke also had a large number of insiders taking advantage of lower prices. Oil up to 45.38 and gold down to 906.10. I think a stock to watch is Amazon.com with news of the soon to be released hand held Ebook readers. What does all this mean? Well I think it's simple, we just need to keep our eyes open for the opportunities that are out there. I think companies like Dell or even Disney could be our next stocks to double over possibly the next year or to year and a half. Oil leveling out around sixty by years end is a safe bet. Even for the safer bets several ETFs look very promising. Target and BigLots both to open several new stores this year two good ones for the long term. The over all economy bringing the market down, I think creates great buying opportunities for the soon to be retired or the kid just getting started. Now is the time to get at it.

Were does the intelligent investor turn?

With a mixed market today, which side is up? We've seen some down grades in the home building sector. Energy stocks seemed to have had a good rally after yesterdays historical finish. The automakers posted lower sales numbers with the exception of a few who broke even. Even Fords F-Series had a 55% decline from last years sales numbers. There was a hand full of stocks that held their own or better today. Pepsi, Procter and Gamble, 3M, Apple, Nike and Catepillar. Even in the worst market there are a few bright spots were the intelligent investor can make his strong hold. A investor has to wonder how fast of a turn around there will be with the government waisting our money on earmarks in the new budget. 1.7 million for pig odor research in Iowa 6.6 million for termite research in New Orleans, or 2.1 million for grape genetics research in New York. This could even be a investment opportunity. Although I don't really don,t see that being the case. Maybe we need to look at growth vs value. Even though the value of some stocks are down they have still found room for growth. Auto Zone, Visa, Bristol Myers and Verizon. We need to be the intelligent investor keep doing the homework and every thing will look to the upside.

Market investors! Dow below 7000

Todays market outlook is grim to say the least. There are some up sides. Companys like Intel, Microsoft and WalMart seem to to be holding their own. January sales figures are up. Manufacturing spending is up. Gold of course is on the rise but only because people are escaping the markets to a safer haven. So what do we do in a market like today? Be an intelligent market investor. We should be looking for dividends. Their are alot of companys that have a yeild in the 6% to 9% range trading below book value. In any given market those are good returns. Any intelligent market investor needs to be doing their homework. Their are plenty of place to get information off the web. We just need to get out there and do it. Many free portfolio pages through out the web can get you the information you need to start getting your returns you deserve.

Were today? Gold or Penny Stocks

The market landscape seems to change every day, every hour or every minute. The big money runs to gold. The little money runs to penny stocks. In the next few month you will see the markets jump around. The question is which way do we go. The large part of Wall Street says to keep you money in cash. Why lose the profits that await? A little research will bring big yeilds.