Investors are in what Bloomberg writer Adam Haigh calls a euphoria today. According to my RAGE Gauge, Americans are still not factoring in much, if any, risk. While the economy is strong and the stock market is up, it's always a good idea to be wary when others are not. When you hear words like euphoria being used to describe investor mentality, it pays to be skeptical. Haigh writes: Euphoria on Wall Street that stocks can just keep on building on record highs is getting so stratospheric that it’s reaching levels that previously signaled a slump. Analysts are ratcheting up their forecasts … [Read more...]
You’ve Read the Last Issue of Intelligence Report: MTI and RAGE Gauge
In case you missed it, here’s what Dick Young wrote in his December 2016 issue of Intelligence Report: My Revitalized Market Tension Index (MTI) When will we know that the economy has entered recession? This month, I am reintroducing my Market Tension Index (MTI) to help you and I determine whether the economy is in recession. This will be the first of what are likely to be many more proprietary indicators and tools I plan to roll out to help you become a more comfortable, confident, informed investor. My revitalized MTI is a composite index of indicators that have historically peaked … [Read more...]
November RAGE Gauge Tells Me Investors are Too Comfortable
My goal for you with my monthly RAGE Gauge is to provide you with a quick reading of how risk is being perceived right now—how risk is being interpreted. In my line of work, there is never enough attention given to downside protection—keeping what you have—too much energy is wasted thinking about keeping up with the other guy. In that world, the grass is always greener because of: How much “they” have, where their kids go to school, what they do for a living, and where they live. “They,” take up an enormous amount of energy. A more efficient use of energy focuses on what you do to … [Read more...]
October RAGE Gauge
My October Rage Gauge is in and it seems like the frogs in the pot have no idea what’s going on around them. When someone tells me they can handle a 20 percent hit because they’ve “made” so much money in this market, I think to myself, “they haven’t done the math on a 100 percent hit.” Another month has passed and more records have been broken. Now would be a good time to think about protecting your portfolio. You never know when the big hit is going to come. … [Read more...]
September RAGE Gauge: Gold, Interest Rates and Your Survival
The story for this month’s Rage Gauge is gold. What is it telling us? What is it worried about? Inflation, N. Korea, the economy? In my daily calls with investors the common refrain I’m getting about the stock market is that they don’t trust it. Gold has been jittery of late and I’m not about to guess its short-term track. It sold off big-time yesterday. Which brings me to interest rates which are, if you can believe it, lower. T-bill yields peaked on July 25, closing at 1.18%. Since then the markets have gotten jittery and yields are back down to 1.05%, though they've been rising pretty … [Read more...]
RAGE Gauge: Is This the Calm Before the Storm?
Is this the calm before the storm? Why bother getting into the prediction business when you can safely navigate these waters with a well crafted plan? It begins with you. Are you protecting your money as well as you can? Now is the time to look out into the ocean and think long and hard about what you're doing. Remember, when the storm warnings come you need to have the discipline and conviction to ride it out. Having spent many an hour sailing the local sea of Newport, Buzzards Bay, and Vineyard Sound, storms turn seconds into minutes and minutes into hours. You hope it will end … [Read more...]
RAGE Gauge: Investors Aren’t Paying Attention
My July RAGE Gauge is in, and four letters come to mind: G-N-M-A. As in Vanguard GNMA. If you don’t have some already, then what are you waiting for? The calm in the markets is unsettling. My RAGE Gauge tells me investors aren’t paying attention. They are getting complacent, with nearly all my favorite indicators showing investors without fear. Don't fall into the complacency trap. Be vigilant with your investments, now more than ever. Here's an indicator that things aren't as calm as they may seem on the surface. Violent protests break out for second day at G-20 summit … [Read more...]
June RAGE Gauge: Sell Your Winners
Not much has changed in the last month. That’s the conclusion in reviewing the data points in June’s RAGE Gauge. As I mentioned in last month’s gauge, investors seem to be complacent and that feeling continues today. It never ceases to amaze me how quickly investors forget about the devastation markets can bring. They troll the internet for articles that support their points of view. And all is right in their world. Until it isn’t. This is the perfect time to imagine the market falling by 40% to see what that would feel like. How would your overall portfolio handle it? Have you done enough … [Read more...]
RAGE Gauge: Investors are Becoming Complacent
Complacent. That’s the word that sticks out in my mind in studying May’s RAGE Gauge. Investors have become complacent. As the indexing craze continues mad money props up the same stocks. Is that a good idea? There’s a false sense of confidence in believing one is diversified from buying an index when only a handful of companies move it. May’s reading is another warning of how complacent investors have become. It doesn’t mean the party is over. But it does mean more money riding on a few names. Don’t let the complacency bring you down. … [Read more...]
RAGE Gauge: How will you feel if the market drops by 40%?
My April RAGE Gauge is in, and it tells me folks are feeling OK. But it’s a tense OK. In a “what have you done for me lately world,” it’s a tough existence for the “steady as we go” crowd for whom I work with on a daily basis. For those of you who, like me, have saved your money, there continues to be an enormous drag on us from the Fed’s reckless low interest rate experiment. And I’ve heard enough about the Index investors. You know those who own the “market,” collect a pittance in dividends, and are in stocks because they “go up.” That’s not investing, it’s speculation. Where’s the value … [Read more...]
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