The market is hitting its lows again. Don’t worry, stay invested in the right sectors.
This time, high oil prices have scared investors and put a damper on the market. Leading the downturn is the financial sector, which declined over 28% in the first half of the year. This has been a major reason for the 14.44% decrease in the Dow Jones Industrial Average over the same time period, as one in six Dow members is in the financial/insurance sector. Financials have not been the only ones hurt, as autos, housing, and retail are a few more sectors that have been feeling the pain of this market. The good news for us is that we have not liked those sectors and have not been hit like the stock market indices. Moving forward, we feel that there is the possibility of another bank or two, domestic or foreign, to go under. As a result, we recommend waiting to see that before bottom fishing in the financial sector.
With lower interest rates (read How Do Interest Rates Affect You?), we expect the second half of year to be a better environment overall. This assumes that oil will level and/or start to decline. We still like the internet and tech, but be cautious of risky sectors (i.e., financials, retail, autos), as we might have to wait until the fourth quarter for a better market.
There is a great deal of money to be made in this environment, especially with our short term trading strategies. There will surely be plenty of volatility going forward and we will continue to lighten up when the market is overbought and look for bargains when the market is oversold, like we are currently doing.
We are continuing to improve upon our website at www.tellone.com by adding new links and functionality. We always welcome any suggestions or comments.
Enjoy the moment, your friends, and your family while we wait for a better stock market. Have a happy 4th of July and a relaxing summer.
Filed under: Investments
