| |
| |
|
Wealth Building Information |
|
|
|
High Flying Market Makes Good Buys Hard to Find
AS THE MARKET FLIES HIGHER, GOOD BUYS ARE BECOMING HARDER AND HARDER TO FIND. Market activity is almost beginning to resemble the jumpy behavior typical of internet stocks in late '99, when they were at their most frothy. Despite that, we still see values in the market. It's still possible to make money, but stay informed. Rather than jumping in aimlessly, our readers have the insight to watch for opportunities. Most people, however, have only just begun to realize that the market is headed upward. They missed most of last year's astounding gains, and they're looking to "catch the wave," albeit a bit late. They may be disappointed. Many technology stocks, in particular, are already far ahead of their realistic worth. Other "name" companies, like Wal-Mart, have never come down to reasonable levels. If new investors jump in without discernment, they'll be buying into a market that's already somewhat overvalued. If they simply buy tech-heavy index funds or big-name stock portfolios, they will be giving those same leaders another boost in their already hefty P/E ratios. Also, look for further inflation among those "name" stocks. The gamblers among us might want to play them for the rise, but we feel that better, safer opportunities exist readers know to look outside the mainstream for their investment ideas. Among those lesser-known equities, one must certainly consider foreign stocks. Investing only in America is not enough in any market and is - at a time when the U.S. dollar is at its weakest - more dangerous now. Finally, the rest of the investment community has begun to realize that the dollar has been set up for a fall. The weakening dollar has been the story for the past year, alongside the news of a strengthening market. These seemingly contradictory results demonstrate just how strong the market's 2003 rise really was. To power through the strong downward pressure from a weak dollar, the upward push needed to be doubly strong. The debate rages over the cause of last year's market rally. Is it an overdue recovery from a distorted drop? Or is it an emotional upswing in the midst of a continuing bear market? Resist the urge to jump into one camp or the other! We cannot know for certain which is true until we know more about the underlying economic recovery. If the recovery is real, the market rise is justified and is likely to persist. If the recovery is a phantom, based on Keynesian over-spending, coupled with stimulation-based tax cuts, then the market rise will be short-lived. My guess is that it is a mixed bag. While there is likely some potential for real recovery, the greater impetus has probably been the spending spree in Washington. Eventually, the piper must be paid, and the economy will weaken accordingly. Still, it is possible that the recovery may be fully legitimate. We can't really know for certain until after the fact. With this ambiguous assessment, how can we make intelligent investment decisions? The answer is surprisingly simple, and yet unexpected. If we see a strong recovery, the spillover will affect all free economies worldwide, and will have the greatest impact where stocks have been beaten down the most and growth potential is highest. That would be the emerging markets. On the other hand, if the recovery is weak, and the dollar continues to plunge, we'd want to be invested overseas: particularly in those countries with the least dependence on the U.S. and those which are most undervalued. Again, this leads us toward certain emerging markets. A savvy investor will be looking toward opportunities in unexpected places, regardless of one's outlook. This explains our growing emphasis on World Investing. Among other opportunities, we've been browsing discounted Country Funds recently. Some attractively valued funds at the present include the New Ireland Fund (IRL), and the Swiss Helvetia Fund (SWZ) among the more developed world, and Brazil Fund (BZF), Latin American Discovery Fund (LDF), and Korea Fund (KF) among the faster growing economies. We're also looking for individual stocks in some of these economies, many of which have found their way into our stock analysis pages. The other key to finding success is avoiding moribund bureaucratic nations. A country which limits firms' ability to remain flexible in this changing world dooms them to slow or even negative growth. For this reason, we tend to avoid some heavily regulated European economies such as France and Germany. We also remain skeptical of growth trends in still-communist China and Vietnam. Since the same structure limits true innovation and prevents the winnowing of the inefficient, we find it difficult to believe that the industries will escape more severe growing pains than those in Japan and Korea in earlier years, even while there is great opportunity. Instead, we prefer the opportunities among nations with a proven dedication to freedom. Ireland and Switzerland fit the bill clearly, as do Australia and New Zealand, Netherlands, Austria, Portugal, and the Scandinavian states. We also see opportunity in sections of Eastern Europe, largely due to opportunities from convergence with the European Community. Estonia is particularly well-run, but provides few investment opportunities. Hungary, Poland, and the Czech Republic are popular investment zones in the region. In the developing world, picking winners is much more difficult. Some smaller nations like Barbados and Malta offer good governance but few investment alternatives. Colombia has a reasonable government, but it has proven incapable of dealing with drug smugglers and revolutionary insurgencies. Brazil has been making surprising strides in a positive direction, despite the election of a socialist leader. India has a dominant position, and improving institutional structures. Investing in emerging economies is fraught with uncertainty. But opportunities more than compensate for risk. This kind of investing is not for the faint of heart. For the more conservative, we recommend sticking with safer economies like Ireland, Switzerland, and Australia, with smaller holdings in some of the safer developing nations. Still, we feel keeping all one's holdings in U.S. securities may be less than ideal. If the dollar continues to depreciate, the U.S. may not remain the strongest market. That's not to say that the U.S. market is unattractive. We are still finding great opportunities there, but they are becoming fewer, and as more people pour their moneys in, and the prices rise, their number will continue to decrease. Keep an eye out for variety in your selections. To send comments or to learn more about Scott Pearson's Investment Advisor Services, visit http://www.valueview.net Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide variety of clients. His own newsletter, Investor's Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally, and in the U.S.
MORE RESOURCES:
Wealth-Building - Google News |
|
|
|
RELATED ARTICLES
One Pipeline Is Worth A Thousand Paychecks It is with great pleasure of having you here at this hour. Let me get it straight and be honest with you at the very outset. Turn Your Job Loss Into the Opportunity of a Lifetime There are few things in life that are more stressful than the loss of a job. You may think that the loss of your steady paycheck puts financial freedom that much further off, but nothing can be further from the truth. Warren Buffet: Wisdom from the Worlds Richest Investor In light of the dominant mindset overshadowing the market these days, a breath of fresh air might be welcome. This month, we're devoting this space to wisdom from Warren Buffett, the world's richest investor. The Secret Barrier To Wealth - Underearning Is the ghost of "Money Past" haunting you? Do you feel like no matter what you do to "get ahead" it never works? The problem may not be what you are doing, it may be what you are thinking. Many of us have deep spiritual and psychological patterns around money that can block our efforts at managing our money better and creating prosperity. Real Estate Stories that Show You How! Let's begin easing you out of the pits. I mean, comfort zone! I'm going to slowly and methodically give you as many little sparks and insights to the relatively simple ways that ordinary people use real estate to achieve extraordinary results. My Entrepreneurial Fire-I Grabbed My First Million Before I Got Too Old My First Million took me exactly 27 months to achieve. I remember the day I made the resolution with self respect. How Much Do You Need To Earn Per Hour To Achieve Your Yearly Financial Goals Have you ever asked yourself what your highest income producing activity is?If you're like most people you probably go about your day-to-day business never really thinking about the moment to moment activities that consume your day.I'd like to walk you through an exercise that has helped me and my clients really stay focused on earning their highest possible revenue per hour. Net Worth Nympho There are plenty of people who are in love with their bank books. In life, there will always be extremists. The Financial Equation that Will Set You Free! I have a good friend who works in an area of the US that has more than itsshare of poverty. He called me the other day with a very broken heart. Early Retirement The Dream of the Working Classes Everyone dreams of early retirement. The idea of no longer having to work at an early age is very attractive to some people and they dream and wish all day long about the day that they can afford to say, "Take this job and?" well, you know. Virtual Millionaire Strategy Exposed Let's begin this lesson with a definition of the term "Virtual Millionaire". This is an expression, known to the CPAs, but unknown to the general public. Retirement - Can You Afford It? Every day you work is one day closer to your retirement. But can you afford to stop work? If you were unable to go to work for 6 months due to illness or injury, would you still have enough income to support yourself and your family? Even if you kept working, would you have enough money put aside to comfortably retire after a hard lifetime of work? If you kept working or doing as you're doing today, for the next 10 years, would you be in a better position to retire? Have you ever calculated whether your superannuation or the pension is going to be enough for you to retire on?For most people these questions either remain unanswered or have negative responses. The Wealth Connection - 2 Steps to Brighten Your Golden Years Estimated Reading Time: 4 minutes -- Envision your life 10 or even 20 years from now. Where do you plan to be? What are you doing and with whom?Most of us between the age of 35 and 50 years hope to be retired to some degree in 15 to 20 years or less. High Flying Market Makes Good Buys Hard to Find AS THE MARKET FLIES HIGHER, GOOD BUYS ARE BECOMING HARDER AND HARDER TO FIND.Market activity is almost beginning to resemble the jumpy behavior typical of internet stocks in late '99, when they were at their most frothy. The Predicament of the Newly Rich They are the object of thinly disguised envy. They are the raw materials of vulgar jokes and the targets of popular aggression. Create Tax Savings And Transfer Wealth To Your Child With A Roth IRA Parents must give serious thought to protecting their family through estate tax planning. While life insurance and trusts should be a part of every plan, Roth IRAs can be a simple tool for passing money to your child on a tax-free basis. How to Have MORE Fun With YOUR Tax Refund in 2005 I counsel a LOT of people about money. I see the same mistakes being made over and over again. 10 Ways to Save $50 Per Month: The Art of Pinching a Penny Until It Screams 1. Save up to 50% per month on convenience cleaner cloths by cutting them into half, i. The Secrets of World Money Flows and A Simple Way to Understand Them You can learn the secrets of world monetary flow if you will simplify the concept. The Allegory of a "The Beach Ball," is not taught in all universities, perhaps it should be. Who Else Is Tired of Life Punching Them in the Face? Remember the bloodied face of Randall "Tex" Cobb?He was a boxer who fought in a championship bout against then heavyweight champ Larry Holmes in June of 1982. It wasn't pretty.
|
Sponsors: Chicago Paving Contractor | Remanufactured VTL | Religious Statues | Search Engine Specialist
