How to play a sideways market

Navigating through this market can be a challenge

It has been a strange, choppy start to 2014 on the S&P 500.    After the 120 point emerging market sell-off in January, the index rebounded to hit new highs on March 7th, only to pull back to where we started in January.
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What to expect in 2014

At times it seems like being invested in today’s stock market is like playing a ‘scratch n win’ lottery ticket:   An investor might believe they are close to winning, when in reality the end result has been predetermined.

In 2012, the financial crisis of 2009 was still fresh in our minds.  The European crisis was just getting started, and markets were volatile.

In 2013, Europe stabilized.  Greece nearly collapsed and left the EU, but the market moved on (even under the new precedence of using bank depositor cash to save the country).  The U.S. Government even shut down for awhile, but the market played onward and upward.

If you were a short seller in 2012 and, especially 2013, you got your clock cleaned.  It didn’t matter that all the news and evidence and statistics supported your position, markets were going up with or without your approval.

10 or 15 years ago, the bears might have been right about the negative fundamentals and their effect on the market, but in today’s centrally-planned global economy it’s a different game.  So what has changed since then?Continue reading