THIS WEEK IN THE MARKETPLACE
OK. Like most people, you’re probably asking the same question: “I wonder when the market will reach bottom?” Realistically, no one can answer that question with any real certainty.
A number of analysts, many of whom we follow or stay on top of, are all beginning to suggest that “if we’re not at the bottom yet, we’re very close to it.”
I’ll try to give you all a rundown today on their thoughts and projections.
Understand that, while each of these analysts has really good track records in their recommendations, none would agree on the timing or even the same month when they believe that the market will have bottomed. All, though, are suggesting that we may be very close to a market bottom, if we’re not already there. I’ll give you a quick, but individual, synopsis of the suggestions of each of the analysts we normally follow, because they have such good, consistent track records in their overall market prognostications.
It’s time to be aggressive again
The first analyst I want to highlight is now suggesting that, if investors tread carefully, they can start to become aggressive again as they begin to reformulate their stock portfolios. Two key stock plays that he is now starting to recommend are both Dow Jones Industrial Average “blue chip” issues. One issue is the Dow’s oldest member, while the second is one of the Dow’s newer additions.
The next bull market may begin a bit later than you are thinking
Our second analyst is now suggesting that the bear market is now over, and that we are in a transition period from the bear to the bull. He doesn’t believe, though, that the next bull market will begin in earnest until early-2010.
Invest carefully
Analyst number three, ever the carefully thought-out prognosticator, is now indicating his belief that, just in case the market hasn’t really bottomed yet (but he still thinks that it has), investors should hedge their bets by picking out with their broker’s assistance several good quality large-cap blend issues as a prudent first step to getting back into the market.
Bottom fishing.
The president of a well-known, aggressive, short-term trading research firm is now recommending that given that the bottom of the current market has just now been reached now is the time to “begin dipping into equities again, especially those previously good quality issues that have been grossly oversold.”
Going for another train ride
While we’re at it, let’s look at selected foreign stocks, especially those in China. As a senior analyst for a research firm specializing in investments in foreign stocks has recently suggested, “While the earnings of many Chinese public companies may seem grim at the moment, the country’s accelerating railway growth will get you somewhere, thereby making their infrastructure stocks worth another hard look,” as well.”
Getting Ready for the Spring
While a number of analysts are suggesting that we’re still in a bear market, although one that may change into a bull in relatively short order, investors shouldn’t ignore the potential for a significant rally in the early st ages of a cyclical bull market. As a matter of fact, this same analyst also reflects the suggestions of the majority of other analysts (some of which are quoted here) if and when the bull begins to move.
And What about the Stimulus Package
If the stimulus package makes its way through the Congress and then on to President Obama’s desk for signature, then investors need to look at the financial markets response to the stimulus bill, as passed. Wrapping things up are the comments of Art Hogan, chief market strategist at Jefferies & Company, when he said, “As we get more details, we will start to see the enthusiasm we saw at the end of last year for the fiscal stimulus plan.”
He still ended his comments by urging patience, though.
Paul Rendine is Owner of the Rendine Financial Group, LLC in Salisbury, MD, offering securities through First Allied Securities, Inc., member FINRA/SIPC. You can contact him at 410-860-1137 or at his e-mail address at prendine@1stallied.com with any comments or questions.