The Year Ahead

We 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 retirement accounts.� 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.� It�s 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 you�re 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.