Sunday, February 01, 2015 11:37am
North Adams, MA now: 21 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
SIGN IN | REGISTER NOW   

Home About Archives RSS Feed
@theMarket: 707 Days
By: Bill Schmick On: 04:01PM / Saturday February 19, 2011
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0

It's official: the S&P 500 Index is now up 100 percent from its low of 666.79 back in March 2009. It was the fastest double in stock prices since 1936. And it is not over.

I have suggested several times in past columns past that a big move in stocks would come when individual investors sold their bond holdings, gathered their courage, and returned to the stock market. That time may be upon us.

Consider that this is the fifth week in a row that inflows into domestic stock funds have increased. A total of $21.3 billion moved into equity mutual funds in January. The first week in February saw an additional $5.85 billion and last week another $9.3 billion flowed into equities.

The money is coming out of bond funds (mainly funds invested in U.S. Treasuries and Munis). As expected, the stock markets' five-month winning streak and low rates of return in the government bond markets and money markets are forcing investors back into equities. This has been my premise for well over a year.

Corporate profits are approaching record levels. The economy is gaining steam, inflation forecasts remain subdued (2-3 percent/year) and interest rates are historically low. That is what I call a "sweet spot" for making money in stocks. But the market's steady rise since the beginning of the year, with little to no corrections, has also confounded veteran market watchers. Some respected technical analysts I know have actually given up trying to predict the timing of a pullback. The truth is that a correction can happen at anytime, but so what. Buy the dip.

Consider that the U.S. market continues to rise in the face of tensions in the Middle East, soaring global commodity prices, declining stock markets in the high growth emerging markets and continued financial concerns in Europe. In the past, any one of the above circumstances has had the power to take our market down 5 percent in a blink of the eye. But thanks to "Bennie and the Fed," investors own a "put" on our market. Back in November in my column "Don't Fight the Fed" had the following explanation for why the market would continue to rise:

"The Fed is clearly telegraphing to investors that they want a higher stock market, and like unemployment and the economy, they will do what it takes to accomplish that goal. This message is behind the jump in the stock market this week. My advice to you is don’t fight the Fed. Buy stocks.”

I stand by that advice.

On another note, have you been watching the price of gold and silver? A few weeks ago I suggested that the price correction in both these precious metals was just about over. Since then both gold and especially silver have roared back to life. Silver is above $32 an ounce. It is getting closer to my target of $36-$37 an ounce, so be ready to take some profits when we reach that price level. Gold has lagged silver so far, but I believe it will ultimately narrow the lead. Nonetheless, both metals performance have been far from shabby.

Bill Schmick is an independent investor with Berkshire Money Management. (See "About" for more information.) None of the information presented in any of these articles is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or e-mail him at wschmick@fairpoint.net. Visit www.afewdollarsmore.com for more of Bill's insights.



0 Comments
Tags: metals, growth, stocks, bonds      
News Headlines
Pittsfield Suns' Hot Stove Features Red Sox GM Cherington
Watertown Tops Berkshire Battalion in OT
Adams-Cheshire Little League Signups Set
MCLA Athletic Training Major Wins EATA Scholarship
Fairview Commons Receives National Award
Senator Downing Hosts Town Hall Forum on Wednesday
2015 Pittsfield 4th of July Parade Theme Announced
Goodwill Offers Soft Skills, Custodial Workshops
Cultural Pittsfield This Week: Jan. 30-Feb. 5
Berkshire County Arc Accepting Applications for 2015 Scholarships

Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (158)
Independent Investor (214)
Archives:
January 2015 (9)
December 2014 (7)
November 2014 (4)
October 2014 (9)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
May 2014 (9)
April 2014 (8)
March 2014 (6)
February 2014 (6)
Tags:
Debt Ceiling Stock Market Recession Euro Fiscal Cliff Crisis Japan Greece Interest Rates Europe Commodities Europe Stimulus Debt Election Banks Deficit Congress Housing Pullback Markets Taxes Oil Stocks Fed Metals Economy Rally Retirement Currency Bailout Energy Selloff Jobs Federal Reserve
Popular Entries:
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Don't Fight the Fed
@theMarket: QE II Supports the Markets
The Independent Investor: Does Cash Mean Currencies?
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: Will the Municipal Bond Massacre Continue?
The Independent Investor: How Will Wall Street II Play on Main Street?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
The Independent Investor: College Savings Accounts Are Not Risk-Free
@theMarket: More Stimuli Equal Higher Markets
The Independent Investor: The European Central Bank Delivers
@theMarket: Tail That Wagged the Dog
The Independent Investor: What's Happening to the Movies?
@theMarket: What Will the New Year Bring?
The Independent Investor: Think twice Before Co-Signing Student Loan
@theMarket: What Will the New Year Bring?
The Independent Investor: Could Greece Upset the Applecart?
@theMarket: Santa Comes to Town


View All
Boys BB: Pittsfield vs Drury
Pittsfield boys basketball team won over Drury 65-51.
BFAIR Family Fun Night
BFAIR hosted a Family Fun Night at Greylock Bowl & Golf...
Girls BB: Drury vs Wahconah
The Wahconah girls basketball team defeated Drury Thursday...
Boys BB: Lenox vs McCann Tech
The Lenox boys basketball team was able to pull away from...
Alpine Ski
Multiple teams at Slalom, Bousquet
Hockey: Mt Everett vs...
The Wahconah hockey team defeated Mount Everett, 3-2,...
Berkshire County UCP Telethon
United Cerebral Palsy of Berkshire County held its 52nd and...
Girls BB: Athol vs Hoosac...
McKenzie Robinson dished out nine assists to help the...
Swimming: Wahconah vs St....
Liz Bernardy won the 100-yard freestyle and 200 individual...
Boys BB: Drury vs Hoosac...
Friday night basketball, Drury boys win over Hoosac Valley...
Girls BB: Lee vs Mount...
Barrett scored a game-high 27 points in Thursday's 57-44...
Boys BB: Smith Academy vs...
The Pittsfield boys' basketball team defeated Smitch...
North Adams Chamber @...
The North Adams Chamber of Commerce held its first...
Hockey: St Mary's vs Wahconah
The Wahconah hockey team defeated St. Mary's Wednesday...
Berkshire Chamber @GFCU
Berkshire Chamber of Commerce held its January networking...
Boys BB: Wahconah vs Drury
The Wahconah boys basketball team was able to pull away and...
Boys BB: Pittsfield vs Drury
Pittsfield boys basketball team won over Drury 65-51.
BFAIR Family Fun Night
BFAIR hosted a Family Fun Night at Greylock Bowl & Golf...
Girls BB: Drury vs Wahconah
The Wahconah girls basketball team defeated Drury Thursday...
Boys BB: Lenox vs McCann Tech
The Lenox boys basketball team was able to pull away from...
Alpine Ski
Multiple teams at Slalom, Bousquet
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings
Advertise | Recommend This Page | Help Contact Us | Privacy Policy| User Agreement
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2000 Boxcar Media LLC - All rights reserved