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December 2017
« Oct    

Stock market down, but it’s a good thing!

                What a great start for the stock market!  No, that is not sarcasm or a joke; we at Alphas Edge mean it!  Recently, we had been bothered by the rate of the falling dollar, increase in rates, increase of the cost of a stocks, increase in the emerging markets and increase in commodity prices.  The danger was that the falling dollar would turn into a free fall and the US consumer would be faced with run away inflation.

                This correction is not only needed but crucial to the economic recovery.    More importantly, it is an essential component for global economic stability.  Sure, not everyone will profit or understand this correction.  In fact, most will feel that they are becoming poorer as the stock market drops in value.  But the truth is, as long as the dollar is strengthening while equities drop, we are on the path towards stability and US prosperity!

                Here is what you should hope to happen in the next 6 months; dollar strengthens back up to the mid 90s level, stock market drops to retest the lows, interest rates drop as investors seek safety of the US T Bill, and commodities drop in price by 20 to 40%.

                Our advice is not to fight this necessary correction, sell your emerging markets as I did and invest in the dollar.  Hopefully, the Goldman Sachs bankers are smart enough to do the right thing for the US and the world.

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