Financial Trend Forecaster Newsletter – A must read

Today I got my copy of the FREE Monthly Financial Trend Forecaster Newsletter. I have mentioned this newsletter before and believe it is well worth subscribing to e-Trends.

The site itself has some great articles and charts on it that show what is happening to the NYSE, NASDAQ and Inflation/deflation.

NYSE Annual Rate of Return since 1990

The chart of the Rate of Return on the NYSE is shown here. You can click on it to get a larger picture. It has “fallen off a cliff” according to the chart. You are advised not to even consider investing in stocks until a buy signal is show on this chart.

If you are in a fund consider putting any additional money into a cash deposit account for now.

Inflation/Deflation are also very topical right now. Most economists and governments believe deflation to be far more dangerous than inflation. A sister site InflationData.com is a great place to keep up with inflation/deflation trends. There are also several articles with good advice on what to do to protect yourself against either one occurring.

“Knowledge is power” may be an old cliche but in the current financial crisis you must take time out to keep yourself informed about what is happening. You can’t trust anyone right now. This will give you your best chance to position yourself for any market recovery.

There is no going back to the same old investment strategy of “buy and hold” and of giving all your money to some wealth manager who promises the earth and delivers nothing after many years of “investing for the long term”. You are just giving them a salary at your expense.

With the break up of the investment banking integrated model, the engine of growth, rampant speculation is gone. Regulations due from Tim Geithner will aim at steady growth and “responsible investing” but will most likely over-shoot and kill investment flows for a while. This will most likely mean low or no returns for some time to come.

Soon however we will all  grow very tired of no or low returns in a stagnant economy. Our risk appetite will return. When that happens governments will start to roll back the regulations. Then investment will pick up and it will be on again for young and old alike.

Knowledge and being able to sort the good information from the bad will help you get on the right side of the smart money to ride the bull. Hopefully you will make up for past losses and add to your nest egg for the future. We don’t know when it will happen, but it will happen.

Using information from these sites you will prepare yourself and have the knowledge. There will be no excuse. You …

  • Won’t put all your nest egg into someone else’s pocket to look after.
  • You will understand the difference between risky assets and safe assets and have your money in both.
  • You will give yourself a financial buffer of ready cash at the expense of chasing returns.
  • Will write on your fridge door in big letters alongside Rule # 1 – Avoid Large Losses, Capital Preservation above all else.
  • You won’t expose your nest egg just to the stock market.
  • You will have in place an exit strategy from risky assets if things go bad.
  • You will make your financial planner accountable in writing for protecting the major portion of your nest egg.
  • You will understand losses are part of the game of risk and 10-20% should be acceptable if your financial planner commits to saving the rest.

Make these commitments to yourself right now, no matter what your financial status.

Sites and newsletters like these which are FREE and don’t bombard you will email sales pitches about making $1Bn in a week while you sleep are the ones to follow.

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