January 15, 2010 Market Update
January 15th 2010 seems as good a day as any to
write an update. This past week I went
through a number of different reports and they all confirm in my mind that we
need to continue to aggressively protect our investments. Or rather, you need to protect your
investments.
Just a few examples of things I read:
-The unemployment rate in the US continues to climb. ( Now
over10%)
-Housing sales in the US are still declining
-Foreclosures in the US are still increasing
-Last year 140 US banks were shut down. .
-This year some are forecasting double that number will
close.
-Some are suggesting that the S&P is overvalued by 45%
-I subscribe to one newsletter who suggests that the DJIA
will hit 1000 before the next wave down stops.
That’s a 90% drop!!
And of course if the two broad US indices are overvalued
then the TSX will follow suit when they fall.
For aggressive investors, this may be the time to buy some
of Horizons double down ETFs. For example
you can buy the Horizon S&P 500 Beta Bear fund will increase double the
rate that the S&P index drops. The
symbol for this fund is HSD For more
info go here.
http://reports.theglobeandmail.com/jcap/en/69606/html/jovianf/
Or you can buy the Financial bear Funds Symbol HFD
Both trade in Canada on the TSX
http://reports.theglobeandmail.com/jcap/en/66042/html/jovianf/
I would also suggest that if you are holding Gold or Silver as protection in this market that you may want to close out those positions. If the market drops as severely as I suspect then all the commodities will drop as well. It will be similar to fall of 2008 when people sold whatever they could to raise cash.
This should make the US dollar go up as people in general go
to what the perceive to be safe.
If you are not convinced that Money Market Funds are the
place to be, you should be able to still get some yield from a good Bond Fund
or and Income Fund.
Click here for some info about Empire's Income Fund.