From the March low (hit just a few days after our last buy in our model portfolios), the market is up around 50% - among the greatest returns in a few months ever. Makes one wonder how much faster stocks could possibly go up in a short time period. What if the government did what everybody wanted it to do? Perhaps good and bad government policy is overrated as it pertains to stock prices. ...read the rest of this article»

We manage the MAXadvisor Powerfund Portfolios as contrarian investors. When fund investors are panicking and taking money out of stock funds, we try to increase our allocations. When they get their nerve back, often after a big rally, we tend to cut back. This doesn't make gut sense; stocks sure seem safer today than back in early March when the 'D' word (Depression) was being bandied about, but that's the irony of the stock market: It has more upside potential when it seems to have more downside risk and more downside risk when it seems to have more upside. ...read the rest of this article»

There's been a lot of talk about American consumers and what they'll do with their money once the dust settles. Most market analysts, economists, and prognosticators are quite certain that American consumers have fallen and simply can’t get back up. But just a few days ago, the market took off following a five-day slide, inspired by nothing more than news that the "sentiment index," one of the data points published by the Conference Board Consumer Research Center measuring the psyche of the consumer, "surged by the most in six years" in May.  ...read the rest of this article»

The recent market rally continues, but the faster stocks climb, the more our skepticism grows – not that we didn’t want stocks to rise following our trade at the end of February. If this momentum continues, we plan to cut back on stocks, particularly if mutual fund investors keep buying stock funds the way they have in recent weeks.  ...read the rest of this article»

They say it’s always darkest before the dawn. But then again, it’s pretty dark at 1:00 AM, too, and you still have a ways to go before the sun comes up.  Let's  consider a few basic financial factoids currently circulating: (1) stock markets typically recover before the economy does; (2) recessions rarely last more than a couple of years; and (3) compared to recent history, stocks are now cheap.  ...read the rest of this article»

As of Monday, March 2nd the S&P 500 is already down about 22%, including dividends, in 2009 – more than half of 2008’s loss of 37%. The market is now down over 50% from the peak in late 2007. We used this downward spiral to make some more changes to the portfolio, detailed in our portfolio commentaries a few days ago. The goal of this trade was to sell our successful inverse commodities ETF (after an over 300% return), cut back on some recently added closed-end funds that are no longer a bargain, and to increase our overall stock allocation slightly. ...read the rest of this article»

The New Year is traditionally the time of New Year’s Resolutions, “I will eat less and exercise more” or “I will quit smoking”.  New Year’s offers everyone a time to reflect on past behaviors and decisions and commit to resolutions to fix, or prevent, bad behavior. Unfortunately, the investment community doesn’t waste much time on such resolutions. If they did, the list of resolutions  for 2009 would be extensive. ...read the rest of this article»

Mutual fund flows are one of the primary indicators that tell us when and where to invest in our MAXadvisor Powerfund Portfolios.This current bear market demonstrates why popular investing ideas don’t belong in your portfolio – the investments most popular with fund investors have been the hardest hit.  ...read the rest of this article»

October 2008 was one for the record books. The Dow suffered two of the worst single days in its history: October 9th, closing down 7.33%, and October 15th, experiencing an even harsher 7.87% one-day drop. September wasn't much kinder, especially September 29th, when the Dow plummeted 6.98%, accounting for the nineteenth worst single-day drop in the history of the Dow. ...read the rest of this article»

In the last issue we noted we’d likely need to see a 500 point one-day Dow drop on some big bank or other company failure to get fund investors to panic sell at enough of a clip to warrant us stepping up again and buying. Monday’s Dow drop of 777 certainly fits the bill and surely led to some big sales.  ...read the rest of this article»