Will the Fourth Quarter Be Good or Bad?
Thursday, September 6th, 2007
By Mitchell Clark, B.Comm. for Profit Confidential
With all the current volatility on the stock market, it’s great to see some stocks actually going up in price.
I recently wrote about China Fire & Security Group, Inc. (NASDAQ/CFSG) as a compelling investment prospect in this market. The stock’s been strong lately. It has appreciated some 30% in the last two weeks.
When a stock is going up while the broader market is going down, this is usually a solid signal that there’s lots up upside ahead. Considering all the stocks out there, it’s quite rare to find a stock in a sustained uptrend when the broader market is falling.
We’re now in the last month of the third quarter and, typically, September is not a good month for stock prices. For some reason, the end of the third quarter and the beginning of the fourth quarter seem to be a time when investor worries coalesce. Anything can happen during this period and history shows that it is often unkind to investors.
Over the very near term, a lot of investors will be sitting on the sidelines waiting to see if the Federal Reserve makes a move on interest rates at its next meeting (Sept. 18). If the central bank cuts interest rates a quarter point, then the fourth quarter is likely to be a good one for stock prices. If, however, the central bank keeps a hold on rates, stock market reaction is likely to be unkind. I don’t like making predictions, but that’s my gut feeling on the situation.
So, I’m left with a feeling that investment risk is still very high and investors need to be very cautious over the near term. I remain, however, extremely excited about many attractive small companies in the marketplace. When investor sentiment improves, a lot of growth stocks I’m following should do very well.
Next Post: Lenders and Home Reno Companies Feeling the Pinch
Previous Post: Here Come the Job Cuts
Tweet
Sign Up for PROFIT CONFIDENTIAL and
receive a FREE copy of our exclusive report:
"A GOLDEN OPPORTUNITY FOR STOCK MARKET INVESTORS"
We respect your privacy and
will never share your e-mail address.
Mitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.
