Sowing Wealth

No Obama Pop to the Markets on Tuesday

Gee was I wrong last week in suggesting that we might see a surge upwards in the markets today. In fact  heard on the radio that we haven't had an up day in the markets since the inauguration of LBJ. It seems the downward weight of the struggling financials is more than the short-term bull market can bear at present.

Well, I was smart enough to not have bought any SPDRs on Friday in anticipation of the pop. Hey, I'm just writing the blog, not necessarily putting my money down on it. But seriously, change is gonna come and I still feel that after another painful trip down to the low 7,000s we'll see a stabilizing of the markets as Obama's economic team of advisers gets to work on formulating, then pushing out the next stimulus package as well as other adjustments to how the second half TARP funds are used.

I am quite in favor of investing real money in the low 7,000s for I think the risk-reward ratio will be in our favor at that point. Of course, I don't have a crystal ball and this blog is free so as they say all over town, "You get what you pay for." You should do your own research and consult a professional before taking action with real dinero. Good luck to you!

Obama Pop Coming to the Markets?

Stocks are being hammered today and rightfully so if you ask me with all the bad news we've had lately. Citi has agreed to sell off Smith Barney to Morgan Stanley for several billion dollars, Pfizer is laying off people, Deutsche Bank reported a loss of 6.4 billion dollars for their last quarter, and retail is experiencing its worst environment in 16 years.

So, how's the consumer feeling? If I recall this fact correctly, the Consumer Confidence Index was at its lowest reading last month since they started the index. Horrible.

I've been confounded by how the US markets continue to be so resilient in the face of all this bad news. I've wondered if the people buying stocks lately are living in a parallel universe. I still haven't gotten back in to stocks in a meaningful way since pulling out last spring. It's just been way too ugly an economic environment. Many say it's going to continue to get worse.

I feel in my gut that we're headed back below 8,000 for the Dow before too long. And that a move back to the 7,500 level would be a good entry point for anyone ready to get back in for the long haul. But, we have the inauguration coming and that's a historic event that the whole world is looking forward to. There could be an Obama Pop if you will from this wave of enthusiasm with Obama taking office.

I'm not telling anyone to invest based on my thoughts, but I just wanted to put this out there as an interesting possibility. The pop might not happen due to a needed retracement after the climb up starting in November, which seems to be starting today. We'll see over the next four days. I'm still on the sidelines for now. How about you?

Free Professional Financial Advice

I read Kiplinger's newsletters and magazines. They're worth every cent. Later in the month I'll issue a recommended reading list. At any rate, for the 8th year, Kiplinger's is joining with NAPFA, the National Association of Personal Financial Advisors, to provide free advice over the phone for two days in January.

Here are the details: On Tuesday, January 13th and Friday, January 30th you can call 888.919.2345 from 9 am to 6 pm eastern time to talk live with an advisor for help with your investing strategy for college, retirement, tax sheltering, and other related matters. These people usually charge from $100 to $250 an hour to talk with clients. Not that you can talk with them for an hour, but you should be able to get a question answered that moves you forward.

Just be prepared when you call to get a specific question answered. Say you want to know what funds to invest in through your company's 401k plan. Well, have a list of the funds with you and know what you hope to achieve by investing before you call and you'll get something out of it.

Note that you do not need to be a Kiplinger's customer to take advantage of these free call-in days. You might need some patience though as the lines could be jammed in light of our economic times.

How to Easily Invest in Specific Foreign Countries

If you are an equity investing enthusiast, then it's probably already dawned on you that oftentimes the best investing returns aren't had here at home. They're often had by investing abroad. You may have heard of the BRIC countries - Brazil, Russia, India and China - as hot investing areas. There has been a lot of buzz about them. This year the buzz has been mostly negative due to the global financial crisis, as well as terrorism, for example, the Mumbai terrorist attack, which hit the market there pretty hard. These countries will grow feverishly again though in the future.

Just keep in mind that exogenous events, like terrorist attacks, can affect your investments. Or political unrest - think Thailand. So, there is a good deal of risk involved when investing internationally, but with increased risk can come higher returns.

The easiest way I know of to invest in a specific country is by buying foreign country ETFs. An ETF, if you're unsure, is an exchange traded fund. That is, a mutual fund that trades like a stock. ETFs have come on strong in the last few years because they make it easy to spread out your risk, while also concentrating your investment.

So, where are you going to find out about foreign country ETFs? Go to www.netsetfs.com and click on Individual investor. That will take you a page giving more information on 17 different ETFs to choose from. Let's say for example, that you think the Netherlands is a great place to invest for the next few years. You think Shell, Unilever, Akzo Nobel and ING are all terrific companies with great potential but you don't want to deal with investing in them independently. Nor do you want the risk entialed with investing in individual stocks. In that case, you start purchasing shares of AEX, which is traded on the NYSE. Today's closing price was $11.87. That's not a bad price for a basket comprising the 25 leading companies traded on the Amsterdam exchange. I can afford that!

Now this is just an example. I am not recommending that you go out and buy AEX tomorrow. You need to consult a financial advisor and work together to make decisions that are in line with your long-term plans and goals. I just want you to know about this fine tool for your investing arsenal since it ain't all about US investing anymore.