Daily Investment Interpretations

February 5, 2009

2009-2-5    The U. S  markets rose today, but that's only part of the story. The significant other part is that the financial media are egging investors to buy stocks: Stocks at infectious point?, U.S. stocks at or near declines where investing makes sense, News flash: Rate cuts really work, and Senate leader Reid sees enough votes to pass stimulus bill. So is the economy really signaling a turn? Actions by the government may boost stocks: Senate stimulus vote may come Friday and Geithner to unveil administration's rescue plan.    
    The
NASDAQ Composite gained
31.19 (2.06%) to close at 1,546, the Dow added 106.41 points (1.34%) to end at 8,063, and the S&P 500 rose 13.62 points (1.64%) to land at 846. Oil settled at  $40.95, while gold added $12.00 to close at $914.20. The VIX remained essentially unchanged at 43.73. 
    Let's talk about what we might do if we think the markets really have bottomed.
    First, we're not going to really know whether or not the markets have bottomed. It's going to entail a leap of faith.
    Second, the stock markets will climb a wall of worry, so there will be chills, thrills, and spills all the way up. Probably the best we can do is invest pre-planned fractions of our money staircase-style as the market moves up, selling in a similar  way if the market moves back down again. What should we buy? My choices would be the Ultra Emerging Markets Fund, UUPIX, the China Ultra ETF index fund, FXI, the Wilderhill Green Technology Fund, PBW, Vestas (VWSYF), and a few others that I'll try to add tomorrow. (I don't have time tonight to perform the calculations needed for a detailed strategy.)
    I don't think it's a done deal that President Obama will get his fiscal stimulus plan, or at least, not in a timely manner.
    In the bad news department,
Jobless claims at their highest point since 1982, and MarketWatch First Take: Labor market still getting worse.