markets

Please read my disclaimer before continuing.

The Wall Street Journal’s MarketWatch division has an interesting article on their website over the weekend that is extremely optimistic. Here are a few snippets from this write-up:

“Oil, a commodity that's highly sensitive to the economic cycle, has rebounded about 48% from a February low to just over $50 a barrel even though U.S. demand is running low and stockpiles are near 19-year highs.”

The price of oil last year spiked to all time highs during the summer, and then was driven (heh) lower by demand in the next months. Since then the price/barrel has fluctuated greatly. One thing holds true: the more people commute the more money they have as expendable income. If you don’t have $30 to fill up the gas tank you sure don’t have the same amount to eat at Outback.

Consumer spending is a key indicator of economic growth. Companies see increased revenue when consumers have duckets to shell out. If the company is publically traded company the ask price of their stock will go up proportional to revenue (as long as nothing dramatic happens).

Here is another snippet from the article:

“Gold, embraced when the economic outlook worsens, has toppled to about $868 an ounce from more than $1,000 in late February.”

When folks think they are going to lose money in the stock market, they pull out and travel into more secure, lower yield products such as gold and treasuries. The price of gold and the stock market have a directly inverse relationship.

On the same subject eTrade Financial Company (ETFC) stock has been on my watch list since I first opened an account with them. I’m kicking myself now that I didn’t purchase shares earlier this week; the share price has almost doubled. If eTrade gains value that means they are opening new accounts and receiving fees from the purchase of investment products, circulating new money into the system.

The week that the Dow Jones Industrial Average rose 700 points after hitting 6500 I called the bottom on Facebook, something no economist has had the guts to do. Bottom line is that in my opinion, it is the time to get in if you have the means to do so!

markets

If you are reading this blog and are between the ages of 18 and 30, I would like you to take particular interest in this entry. All information provided in this posting is just that, information. I am not a spokesperson for a wealth management group, and opinions represented here are merely my take on the American Stock Market. Securities contain risk and may lose value.

So there is much speculation about the market right now. Critics of the Administration rail that obsessive government spending for “socialist” programs including health insurance coverage, unemployment assistance and mortgage re-financing, are undermining our capitalistic economy. The backlash of the bailout of insurance giant American International Group (AIG) and other bailouts are an often pegged point.

Now, I’m going to take a firm stance on this. Pundits are speculating that the stock market could plummet in the near or long term future. That inflation from the government borrowing and spending will stunt gross domestic product (GDP) and leave your children with the tax burden. This is actually a pretty effective technique from conservatives to drive consumer confidence to the floor, thus making the Administration seem less effective and promoting slow growth of the market.

Objectively looking at this, if you have some extra cash and do your research, the time to buy stock is now. After the collapse in late 2008 the capital market has been a hungry hungry hippo for cash, gobbling up stake as it comes its way. I wanted to share an excel spreadsheet of how I have been doing since initially investing. It is mention worthy to note that I have been studying the stocks that I invested in since the summer of last year.

This research came from news briefs from websites such as the Wall Street Journal’s Marketwatch, Bloomberg News, and most importantly from simply watching the stock market through my eTrade brokerage account. Having this account open has been the biggest tool that I used in making these decisions, because eTrade offers data analysis of each stock. These analyzation tools are updated weekly opinion statements by groups such as Thomson Reuters, Standard & Poor’s, Jaywalk Consensus Report from ConvergEx Group, and Market Edge Second Opinion.

CLICK THIS LINK TO VIEW MY CURRENT PORTFOLIO