Well, the sun will set tomorrow on another calendar month. Here in Florida we call August the "dog days". They are the hottest, most sultry days of summer. They usually fall between early July and early September. They can also define a time period or event that is very hot or stagnant, or marked by dull lack of progress. The term has frequently been used in reference to the American stock market. Typically, summer is a very slow time for the stock market, and additionally, poorly performing stocks with little future potential are frequently known as "dogs."
The stock market isn't fetching many good tasting bones either lately; the market's down about 5% this month and down 11% since we alerted you to the May-October seasonally weak period for holding stocks. Market history does not bode well for September, either. In my archives I find another interesting tidbit. The absolutely worst month to hold stocks: SEPTEMBER. Some simple market strategy: just sell everything in September and buy back when things and indicators look better in October. This is not a recommendation just some food for thought. To end on a good note; many Octobers have been excellent entry points to powerful rallies. We don't predict - just follow the trends and reduce the risks along the way.
As our clients know, our investments in companies in Thailand, Indonesia, Malaysia and our Silver and Gold ploy has made us money and saved us from the sizable declines some other advisors have experienced. We are not the best but our clients sleep well. Where to park cash that's not invested in stocks? We're using the income-based exchange-traded funds (ETF's) investing in diversified corporate, government and oversease debt; they pay between 3.5% and 5.2% per annum (sure beats zero percent matress money that the money funds pay). We also watch the charts of all our investments. Does your broker-advisor use technical indicators from their toolbox? Bonds can fall as fast as stocks when interest rates rise - always a worry around the corner in this business.
Do contact us if you have any questions or comments - we would like to steer you in the right direction with your investments, retirement plans and other important money.
Do enjoy the upcoming Labor Day weekend with your friends and family.
Until next blog, be well.
Larry Unterbrink, Director of Research
Barry Unterbrink, Managing Partner, Chartered Retirement Planning Counselor
Monday, August 30, 2010
The Dog Days of August
Posted by Barry Unterbrink at 8/30/2010 10:33:00 PM
Barry Unterbrink is a fee-based Chartered Retirement Planning Counselor and wealth manager. He and his father, Larry Unterbrink, have experience as portfolio managers for institutional pension funds totaling $100 million, Investment Advisory Presidents and financial newsletter publishers. See http://www.stetsonwealthmanagement.com for more information.