April 2009 - Forecasts & Trends

Forecasts & Trends is much more than just investment blog posts. You need to know the "big picture;" you need to have a "world view," especially in the post-911 world; and you need more information than ever before to be successful in meeting your financial goals. Gary intends to help you do just that.

Forecasts & Trends

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    • The End of America's Financial Independence?

      President Barack Obama recently set the wheels in motion to render the ultimate control of our large financial institutions, large insurance companies, large hedge funds and quite possibly our financial markets as well, to a foreign entity. A new international regulatory agency was created at the recent G-20 Summit in London, and all G-20 countries signed onto it. Sadly, you probably have not heard a word about it until now. Prepare to be outraged as you read what follows....
    • Signs of the End of the Recession - Maybe

      While most of the latest economic reports remain quite bleak, we have seen a few modestly positive indicators over the last few weeks. In addition, the latest Wall Street Journal survey of 53 economists concludes - on average - that the recession will end by the 3Q of this year. If correct, that would be very good news. Yet the leading economic indicators (LEI) and the unemployment rate continue to worsen month after month. Thus, I continue to believe that we will be in this recession for the rest of this year. The Federal Reserve's latest Beige Book assessment agrees, unfortunately. This week, we will take an in-depth look at the latest on the economy, the credit crisis and when we might see an end to this recession. Finally, I will discuss the recent rally in the stock markets, and whether this is a new trend or simply a bear market rally. Let's jump in....
    • How to Recover From the Bear Market

      As the stock market struggles to hold onto March's gains, many investors are now thinking about getting back into the market. While it's not yet clear whether we've seen the worst of this bear market, there are ways to get a jump on repairing the damage many investors have incurred in their portfolios by using investments that are not historically correlated to movements of the stock market.

      Almost all financial advisors caution their clients to resist the temptation to put all their money into risky ventures that promise to make up lost ground - and I wholeheartedly agree with this advice. However, including aggressive strategies as a small allocation in an otherwise moderate investment portfolio can provide the potential for growth no matter what the market's direction. There are no guarantees, of course.

      To that end, I'm going to discuss two aggressive investment programs that I have previously introduced in my E-Letter. I think either program might be a suitable addition for a portion of a diversified portfolio, depending upon your goals and risk tolerance. However, since we don't know what future market conditions may be, a combination of these programs might be a viable long-term option for a portfolio designed to repair the bear market's damages....
    • Insurance Companies - The Next Shoe to Drop?

      Over the last year, the financial media has focused primarily on the major banks and their solvency issues. We have heard relatively little about the major insurance companies, which were not eligible to participate in federal bailout programs such as the TARP. As I will detail in the following pages, most of the major insurance companies are in financial trouble due to the recession and the credit crisis; some major insurers are large players in derivative instruments such as Credit Default Swaps and Collateralized Debt Obligations which have gone bad. In addition, many property and casualty insurers were dealt a blow by the natural disasters (hurricanes) that occurred last year. Some in the industry predict that if we have another bad hurricane season this year, a number of the nation's largest insurers will go out of business entirely.

      The publicly-traded insurers will be releasing their required 10-Q financial statements for the 1Q in the next few weeks, along with their 10-Ks for all of 2008. I am told that these reports are going to look very negative on balance, and this could be quite disturbing to the financial markets including stocks. As we go along, I will tell you specifically what to look for in these financial reports to judge the credit worthiness of your particular insurer. This may be one of the most important and timely E-Letters I have published....