move into the New Year with optimism.
Later in the month the Federal Reserve will probably
lower interest rates a quarter of a percent and then turn
around and do it again the next time they meet.
Fears of a hard landing or a recession are touted by
the same fear-mongers that predicted the demise of the human
race due to Y2K problems. Revenue and earnings
numbers have declined slightly at most companies, but results
are still good, if not even brisk.
Consumers and business are still spending money, but
at a slightly slower pace.
Workers still are pouring money into their 401k funds,
and baby-boomers still need to aggressively build their soon-needed
Oil prices will probably soften during the year.
Technology will move forward and businesses will need
to upgrade their computers and software.
Biotech companies will release new drugs and doctors
will continue to prescribe them to people in bad health. We
are likely to see some sustained rallies during the year as
the massive amounts of money on the sidelines is forced to
enter the markets. Market
volatility is probably going to be with us long-term.
This volatility should provide excellent money making
opportunities for the short-term investor.
Long-term investors may be disappointed because the
markets are more likely to remain in a broad trading range
than making any sustained move to the upside. At the end of the year long-term investors may find lukewarm
returns on their investments due to a generally sideways,
choppy market that may have essentially gone nowhere for those
people employing a buy and hold strategy.
This is the year to be a short-term investor.
Itís also the year to update the paperwork on your
brokerage account so you can sell stocks short if the market
decides to lose altitude for a couple of weeks.
At least you can make money when the market is putting
in a brief down move.
And while youíre reviewing your brokerage account,
make sure it allows trading in options, which are a good hedge
strategy to lock in gains on a position no matter which way
the market moves. Looking
back to January from this coming December will show many profit
opportunities for those who wisely get into the game.