All You Need to Know!

The (most outspoken) "experts" tell us that the surge in the price of gold is a sure sign of a coming recession, if not depression... The gold price is simply telling yours truly that a lot of people (driven by emotion) are bidding on gold and a lot of gold-holders are reluctant to give it up (that is for anything less than $1,800 an ounce) - hence the record nominal price...

I can recall the "experts" in the late nineties telling us, with regard to tech, "we're in the third inning of a nine inning ball game and we have to entirely re-think how we view stock valuations in this internet age." As it turned out, if we were indeed in the third inning, that game got rained out in the fourth, and wasn't rescheduled until 80% of the original players were cut from their respective rosters...

You see, ultimately, the issue is never the price of any single commodity, the prospects for a given sector, or for that matter the present trend in stock prices, the issue is your financial plan... If you're young, you're an investor - in long-term global economic growth... If you're older, you're also an investor, but because you are taking, or are about to take income from your portfolio you have less exposure to the market's inevitable ups and downs. I.e., your money in stocks (save for perhaps dividends) is not currently used for income... Now if your advisor has warned you, prior to the recent sell-off, that (as part of your personal plan) you need to find a way to reduce your monthly distribution, and you haven't, now is indeed the time to take his/her advice... On the other hand, if you're younger, or older for that matter, and have the wherewithal to increase your exposure to stocks (long-term $ only!), now could be a very opportune time - not saying we won't move lower still...

The other day my neighbor says to me; "stocks are the only thing nobody wants to buy when they're on sale".... A wise man indeed...

Now forget about Europe, forget the unemployment rate, forget the Fed, forget regulations and forget tax hikes; the following (my Jan '08 commentary), in the simplest (yet most pertinent) of terms offers everything you need to know and remember about the market and your portfolio...

A Stock Market Conversation
January 2008

The stock market, I