Lombardi: Stock Market Commentary & Forecasts, Financial & Economic Analysis Since 1986

Posts Tagged ‘gold investments’

Stock Market Correction’s Here—Put Dividend Paying Stocks on Your Radar Screen

By for Profit Confidential

earnings seasonThis is the correction we’ve been expecting and it’s affecting stocks as well as commodities. The stock market has been due for a correction after a solid first-quarter earnings season and, because share prices moved so strongly since the beginning of the year. It doesn’t really matter what the catalyst is for the correction; it is well-deserved and a healthy development in my view.

I think the S&P 500 Index is vulnerable now to the 1,300 level and, if it gets there, this would be a meaningful correction and a good buying opportunity for higher dividend paying, large-cap companies. Generally speaking, I think we’re in a time now where the stock market will be more apt to reward income over growth. Large-cap, dividend paying stocks have been leading the stock market since last October and I think this trend will continue right into 2013.

Along with large-cap stocks, both smaller companies and commodities are also experiencing a pullback. Growth concerns in the global economy are real and whether it’s related to price inflation in China or sovereign debt problems in Europe, the new normal is slower economic growth rates, especially among mature economies.

I don’t see any reason why the U.S. stock market can’t reaccelerate this year, especially as we are likely to see sporadic improvement in the economic news. And, while the outlook for corporate earnings isn’t robust, it’s still solid and stock market valuations are reasonable. Investment risk remains high for all equities, but it’s been like this since the financial crisis.

I think that big corporations are keeping earnings expectations purposefully low, in order to outperform come … Read More

Debt Crisis in Europe Highlights Continued Strong Fundamentals for Gold

By for Profit Confidential

It’s pretty difficult to get enthusiastic about the stock market with sentiment so focused on the sovereign debt situation inGreece. Even in the face of solid earnings expectations for the third quarter, investors are looking into the future and seeing slow economic growth, translating into slower earnings. It’s the perfect storm for equities and it makes choices for equity investors very limited.

Inflation at Almost 5%…Is It Any Wonder
Dollars Buy Less and Less?

By for Profit Confidential

Gold prices rising for 10 years straight…the money supply greatly expanded…the printing press for dollars running overtime…am I the only one concerned about rapid inflation? I rarely read or hear a report talking about today’s rising prices or the hyperinflation we may sustain in the years ahead. We all know prices are rising—only housing prices have remained low. Inflation is real and it is here now.

Great…Just What We Need…
More Money Printing

By for Profit Confidential

It’s a bird. No, it’s a plane. Maybe it’s Superman! Sorry, it’s none of these things; it’s your friendly central banker to the rescue again! Couldn’t believe the news yesterday morning… To calm banking concerns in Europe, mostly centered around the repercussions of a default by Greece, the European Central Bank, the Bank of England, the Bank of Japan, the Swiss National Bank and even our own Federal Reserve are providing three-month loans to euro-area banks.

Huge Bearish Sentiment to
Propel Stock Market Rally

By for Profit Confidential

Loyal and long-term readers know I’m a contrarian investor at heart. When investors are selling in droves, I want to buy. Similarly, when investors are buying stocks as a herd, I’m selling. And this brings me to today’s very important issue.

What We Saw on TV Last Night: Sell Dollars, Buy Gold

By for Profit Confidential

Michael's commentary on President Obama’s speech to Congress and the nation this past Thursday night.I know this is a financial e-letter. But I can’t pass on the opportunity to comment on President Obama’s speech to Congress and the nation this past Thursday night.

Maybe I’m the only one who doesn’t get it. Maybe these politicians are all smarter than me. I see something very wrong.

Each time the President gets up to say a speech in front of Congress and Americans via television, I see all these people in the chamber smiling, hugging each other, shaking hands, clapping—these people look very happy to me.

But what’s there to be happy about? They are all failing miserably at their jobs. They’ve failed to revive the pathetic American economy. They’ve created a huge debt for our children. They’ve managed to get the U.S.’s once-stellar debt credit rating downgraded. The underemployment rate in this country is 16.2%, and these people sitting with Obama are all happy? Most companies would have fired them by now.

So President Obama is asking Congress for another $447 billion in spending initiatives and tax cuts to stimulate the economy. We were told this new stimulus package would be “paid for,” but we need to wait until a week from Monday to find out how. We did get a clue—taxes are going up for the “rich.”

Obama talked about Warren Buffett in his speech and how Buffett is “asking” to be taxed more.

Here’s how I see it:

Warren Buffett’s salary from Berkshire Hathaway is just $100,000 per year. Increasing the tax rate on “rich” Americans would not affect Buffett at all, since most talk in the past on raising the marginal tax … Read More

Tonight: The Biggest Speech of His Life; What Investors Can Expect

By for Profit Confidential

Most Americans will be glued to the television tonight to see what the leader of the most powerful country in the world has to stay about his plan to get the economy going; in specific, to create jobs. There is no doubt in my mind: President Barack Obama will be a one-term president unless he delivers on the promises he will make tonight.

Big Banks: Why They Can’t Get a Break

By for Profit Confidential

The simple question: why haven’t jobs been created in theU.S.despite the trillions of dollars the government has thrown at the economy? There are several answers to this question. There is also a new theory I have been working on, as to why jobs in this country have not been created, which I don’t believe you will read elsewhere.

Gold: Getting Ready for
the Coming Correction

By for Profit Confidential

I’ve learned many things about investing over a career that has spanned 30 years. One of the biggest lessons is that not a single investment goes either straight up or straight down. When an investment is rising in price (bull market), there are usually dips and corrections on the way up. Just look at the long-term secular bull market in stocks that started in the early 1980s and ended in 2007—there were many times stocks “took it on the chin” during that 25-year bull market run.

The Best Bet in Town—Resources—Getting Ready for the Big Squeeze

By for Profit Confidential

The key in this bear market with stocks is to stick with resource stocks if you’re a speculator. I like large, blue-chip companies that pay high dividends for long-term investors. For risk-capital equity traders, the best action remains with gold stocks, and some of the best value now is in oil.

Precious Metals Winners—Three
Excellent Wealth-creating Stocks

By for Profit Confidential

One of the best things you can do as a serious equity investor is to review big stock market winners, even if you didn’t own them. It’s the same thing that professional athletes do. A golfer will review past golf tournaments. A race car driver will watch old races. The goal of the process is to improve your own game by seeing what has worked the best in the past. In the case of stocks, reviewing past winners helps an investor to hone his or her stock picking skills by helping him/her become familiar with what a big winner looks like and discover how it all came to be. It takes time and it takes effort, but then again, money doesn’t grow on trees.

The Smartest Dictator of Them
All Seizes All the Gold

By for Profit Confidential

You’ve got to love this guy, Hugo Chavez. The President of Venezuela had already nationalized the banks and the oil industry. Now he’s going after the gold. Chavez took to state television yesterday to tell his people that the gold industry is “run by the mafia,” so “We’re going to nationalize gold. We can’t keep allowing them to take it away.”

Gold: The Only Sector with
Improving Fundamentals

By for Profit Confidential

The stock market is facing some strong headwinds over the short term and all the wrangling is a real shame considering that we’re still getting great earnings results from large-caps. It’s no wonder the spot price of gold keeps ticking higher; there’s nothing else for investors to rally around.

Lackluster Returns in a Lackluster Economy: What the Key Indicator for
this Market Is

By for Profit Confidential

One of the things happening in this market is that trading action is occurring as a slow deterioration, rather than an outright correction. You can see this in the technology sector in particular. This kind of market is really hard on sentiment, because investors can’t see an endgame. In a bull market, investors can quite easily get their head around a major correction in share prices, and even expect it as part of the long-term trend. In a bear market, however, there is no defined outlook—only uncertainty about where things are headed.

Gold Burning up the Chart: My Gold Advice

By for Profit Confidential

What a few months it has been for gold. With war worries in Libya to debt concerns in Europe and the United States, along with rising demand out of China and India, it appears to be the perfect storm for driving gold prices higher. In fact, the break at $1,500 was much sooner than I had expected and, based on the chart, prices could go even higher, albeit the buying may be somewhat ahead of itself and hence vulnerable to some profit-taking.

The June gold broke to a record high of $1,535.10 on April 28 and is looking to go higher. The chart showed a bullish inverse head and shoulders formation in March. Prior to this, there was a bullish V formation in January and early February. The June gold made a strong breakout at the $1,440 resistance that was in place since November 2010 in early April.

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