January is done and it seemed that it was 2014 all over again. Remember those sudden drops and volatile market? Article here. But ! Let us not dwell on that and instead focus on building strength, basing on the mother of all economic-reports – the GDP (Gross Domestic Product – Google it quick!). God is in the details so focus…
“According to the advance estimate, GDP increased 2.6% in Q4 2014 (Briefing.com consensus 3.2%), down from a 5.0% increase in the third quarter. Real final sales increased 1.8% in the fourth quarter after increasing 5.0% in the third quarterMuch of the GDP gain was the result of lower prices adding a boost to the “real” economy. Nominal GDP growth was anemic (2.5%), which was down by more than 50% from both second (6.8%) and third quarter (6.4%) growth levels. Consumption spending was a bright spot, increasing 4.3%, which was the largest jump since 2006. The Employment Cost index Increased 0.6% in Q4, down from a 0.7% increase in Q3. Wages and salaries decelerated, up 0.5% after increasing 0.8% in Q3 2014. Benefits spending growth increased 0.6% for a second consecutive quarter. The Chicago PMI for January increased to 59.4 from 58.8. Production levels accelerated as the related index increased to 64.1 in January from 62.7 in December. The University of Michigan Consumer Sentiment Index was virtually unchanged in January, ticking down to 98.1 from 98.2 (Briefing.com consensus 98.2). Lower gasoline prices and improvements in the labor market were key for overall sentiment growth in January”
So on your forward investments, strongly recommend consumer stocks and given the strength of the US Dollar stirring trouble at corporate earnings overseas, those that get the majority of revenue from the US. Last earnings report of Procter and Gamble and Microsoft proved this. In our workshops I tackle this in “intermarket analysis” help you understand the critical criteria for investing that are low-risk and gives high-reward. By the way, I am happy to announce I will be offering more webinars so stay tuned for the schedule!
On the other hand, you can also stick to the stock (like AAPL) that I know is a strong company and I only need to manage my capital, my risks as well as understanding the market and the appropriate strategies. Like AAPL shot up since their earnings report and I thought it could well extend a few days to $120, I was even half-asleep when I saw that it had reached that price and could already drift lower due to profit-taking, so I sold around 119.50. Lo and behold by closing time the stock had swung to around $2 loss. So I was out at a good price. That’s the value of understanding price dynamics (how volatile it can get, what’s the usual range per day) and being focused on what the market is doing so we can follow it.
So let’s stay alive and have fun in February!
