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"Deal" picks his stock winners....

Stocks to go "Long"

RIMM - $40.85

VZ - $28.05

FCX - $28.97

V - $60.00

FXI - $25.41

NKE - $41.69

GE - $8.90

JPM - $20.92

Stocks to "Short"

SKF - $173.40

BAC - $4.72

These are positions that I would take given the current market however my time frame can differ from your objectives.  I also make moves in and out of positions frequently to lock in profits.

Given that most stocks are trading at their 52 week lows I am skeptical of "shorting" and prefer to go long.

Refinance Today.... before rates go back up

There has been plenty of talk that interest rates will be heading higher in the 2-5 year range.  Were not talking about rates going to 8-10% but rather 15-18%.  I know I have mentioned it here before but knowing that information can also position you for future investments.  It is another good reason to keep cash on hand because if/when those rates increase, you will be able to buy CDs and other government products yielding similar interest rates.  Dont be fooled... it has happened before!

If anyone is looking to refinance or upside down in there house (need loan modification) please email me at screamformoney@gmail.com or post below with your contact information.  I have a mortgage broker who has been in the business 20+ years that provides superior service, the BEST rates, and who will make sure you save money!  Now is the time to lock in with low rates and with Obama's plan coming out within a weak, there is a lot of talk that this will also help borrowers!  Don't sit and wait -  **Licensed in all states**

REFINANCE TODAY!

Picture of the day... I'm feeling good

Stocks are up! It seems that we reached a support level yesterday holding just above 7,000.  If anyone is looking to refinance/loan modification please contact me and I will make sure you're put in the right hands! I will deliver the best rates hands down with the "Sheryl Ackerson Group"

Can you say 1997!!

We have reached all time lows dating back to 1997, I know you can do the math but it's a 12 year low!  As I mentioned from my previous post, if we broke 7,500 we would be going to 7,200.  We are currently sitting at 7,112 and I look for us to hit 7,000 by the end of the week.  The ETF UltraShort Financial proshares have continued to rise and I expect the trend to continue.  

It's a scary market out there and nothing seems promising.  Keep cash on hand as the common saying goes "cash is king".  There also has been mention of interest rates going to 15-18% within the next 3-5 years.  Could you believe that.  As we have so much money coming into the market, expect inflation to rise and investing in TIPS (Treasury-Inflated-Protected-Securities) to be more of a safe haven.  Remember that invest in companies with solid history, good financials (balance sheet, cash-flow), and have a good commander in chief (CEO) running the show.

Proctor and Gamble is down almost 20% year-to-date.  This company has always been seen as a great investment in down times.  Look towards healthcare and utilities.  RIMM - which makes Blackberry's has retraced almost 37% from its previous high this year of $59.00.  I look for this company to continue to make great products and be a good investment in the long run.

Remember- don't buy and hold!  You should always be checking up on your investments and if you don't have the time, hire a financial planner.  In today's market/world, there are many different factors that can lead to the company falling out of favor in the market. 

Foreclosures piling up

Nothing is better than watching Rick Santelli's rant on CNBC... take a look   Rant of the Century

As the stimulus bill works its way through and looks to have an impact, many people on wall street aren't so happy with Obama and the bill.  I want to take a further look at how the bill will affect home buyers and future home buyers.

The anti-foreclosure plan boosts Fannie Mae and Freddie Mac's capital by $200 billion and allows homeowners to refinance loans of up to 105% of the house value.  This is above the usual 80%.  There is also $75 billion worth of incentives to enable home buyers to modify their loans.  If you watch the clip above you will understand why some people are livid.  

I pose the question to all of you... should you be responsible for someone who got into a home with a mortgage they can't afford?  What about the investors and wealthy individuals who can't refinance their own mortgages because there home values have decreased which makes their debt/equity ratio lower and not able to refinance.  There are many individuals who bought homes that they could afford but with so many foreclosures and price declines, what are they to do.  Everyone is hurting!  But why give money to people that shouldn't be in their house in the first place.  Is it so bad to let capitalism work its course and let people go bust? 

I don't believe there is one solution, but I do believe that a lot of consumers who put themselves in these lavish homes that they couldn't afford in the first place should not be bailed out.  What about letting the investors and wealthy refinance? Aren't they the ones that were buying all the houses in the first place which helped grow the economy. Many questions to ask with so few answers from the White House.

Some economist think real estate has flattened out and has hit the bottom.  Is it time to buy?  I would be on the sideline for this one until we gather more information on what will transpire from the stimulus bill.

Can we get any more negative news... cmon Obama

We Need Help!

As we look at the market we are retesting the lows of 7,500.  This is a big number as it constitutes as the support level for the DJIA.  We also have support levels of 770-775 on the S&P 500.  We seem to be going in and out of that support level.  However, if any more news (or bad news) comes out look to break these levels with GREAT volume and we should then find support around 7,200.  We are on high alert and treading water in the deep end.  One move and we will sink.

Reference: My pick of SKF, which is the ultrashort for financials has increased 25%!

Should Obama, Geithner, and Bernake continue to speak to the American public anymore? While they might come off as sincere and understanding, anything they say has a downward affect on the market! I watched yesterday as the DJIA was up 30 points and by the time Obama finished talking we were in the RED.  I think the overall sentiment here is that we have extremely bearish news out here.  We are looking to rally if we can just have some sort of positive news, or no bad news for that matter.

I would continue to hold onto cash but to cherry pick the good companies and buying at low levels.  I believe that buying some strong financials like Goldman Sachs and JP Morgan at these levels are good buys.  Look for JP Morgan to go under $20.  Remember greater risk with greater reward.  I believe JP Morgan will be the one commercial bank to come out of this mess the winner.

I will follow up this post with insight into the Real Estate market

Manage Your Money... Utilize Retirement Plans

If you are like me and watch the market everyday then you might be asking yourself why am I putting money into my 401K, Roth IRA, Traditional IRA, etc.  The answer is this.  Being an optimist, over time you will be dollar-cost-averaging and buying at lower multiples.  Over time your investments should increase.  The 20 year annualized return of the S&P 500 is about 8.22% and 25 year is about 9.61%.  That's not bad!

For your 401K you are allowed the maximum contribution of $16,500 for 2009 and catch up contributions allow for a maximum of $5,500 for individuals who are 50 and above.

By maxing out your retirement funds you are minimizing the taxes you will pay on your total income.  Also know that the money that is being put into that 401K is tax deductible compared to a Roth IRA which has already been taxed.  Also, the difference with a 401k and Roth IRA is that the Roth IRA is tax-free when you take the money out after you reach the age of 59 1/2.  You can invest in a Roth IRA along with your 401K as long as you don't make more than $101,000 for single filers and $159,000 for married filers.  The maximum contributions you can make to your Roth IRA is $5,000 and $6,000 if you are older than 50.  You can have multiple Roth IRA accounts but know that you can only contribute the maximum of $5k for the year.

While 401k funds differ from every employer, there will be many funds to choose from depending on how you want your portfolio to look.  My breakdown is as follows:

Small cap: 30%

International: 20%

Bonds:20%

Large Cap: 30%

This breakdown would be suited for someone who has more of a long-term investment strategy and someone who is willing to take on more risk at this juncture.  For more senior individuals I would suggest a greater emphasis on bonds, cash, and small-cap.  In this troubled market, you will be buying at low prices and over time the market will return. (lets hope so)

If you don't have a 401k and set up your own traditional IRA look at Fidelity, Vanguard, T.Rowe Price, and others.

William O'Neill had an investment strategy called CANSLIM... take a look:

 http://en.wikipedia.org/wiki/CAN_SLIM

Final Word: Invest in those retirement accounts as they will serve you well in the long run.  For those individuals who are above the age of 50, I still recommend maxing out those accounts but to be heavier in bonds, cash, and small cap.  *Small-cap funds will return better numbers before large-cap*

Questions/comments - contact "The Deal"

GOLD.... is it time to buy or is it too late?

As the market continues to linger and we head towards lower levels, should you be a buyer of gold? You can listen to all the guru's on TV and read all the papers you want, but until you learn to look at both sides (pros/cons), you might find yourself on the wrong side of the table.  I think I might have the answer for you!

Gold is a play on the economy... plain and simple! As the leaders of the global economy (U.S.), the United States is the key indicator on movement.  Knowing that other countries such as Russia, China, and India are all having their own economic woes, they follow pretty closely they path of the U.S.  

If you look at the ETF - GLD (SPDR Gold Trust), having invested 10k in 2004 would've given you a total of 20k+ by today!  Knowing this it is safe to say gold has faired pretty well over the past two years.  Some other funds/stocks that would be a play on gold would be Yamana Gold and Royal Gold (AUY, RGLD).  With the price @ 970 and headed towards 1,000, don't be surprised if it surpasses that mark.  The key number that everyone is focusing on is $1,030.  If we do break that number look for gold to run up.

Knowing that many of you have such investments in the financial sector among others would be to buy some shares in gold.  It is a way to hedge your investment on the global economy.  As many economists say " we will have another 2 years of stagnant growth", putting some money in gold isn't such a bad thing.  Listen.... if you think the economy will continue to struggle, gold isn't a bad play! What we know about gold is that there is a value! How can we value any kind of stocks these days when ratios have become obsolete.  We know that the numbers were inflated and still do not know the underlying effects.

I say to put some money in gold if you think the market will continue to be slow and another way to diversify your portfolio.  

Gold plays: GLD, AUY, RGLD

*Please feel free to respond with any comments or if you have any questions and requests for future posts.

What to buy these days.... ETFs, CDs, Preferreds

For those who are looking to do something with their money rather than holding a position all in cash, I might have the answer for you.  An ETF (exchange-traded-funds) allows you to invest in the market like a stock, but it will follow the index's more closely.  There are numerous ETFs out there.  Take for instance, if you think the financials are going to continue to fall I would suggest investing in the ProShares UltraShort Financials (SKF).  This can be a risky position as this ETF tracks the DJIA that correspond to twice (200%) the inverse of the daily performance of the Dow Jones U.S. Financial Index.  There are many ETFs that can meet the investing strategy for your portfolio.  A benefit of investing in an ETF is the relative low expense ration compared with Mutual Funds.

Other notable ETFs:

SSO, FXI,IVW,GLD,PFF,DVY

CDs have long been the most conservative way to invest with no risk and little reward.  If you have some extra cash laying around you can put in in a CD yielding an APY of 2-3%, but if it was me I would head to DollarSavingsDirect.com and open a savings account giving an APY of 3.20%.  This pays much better than a CD and your money is always available!

Preferreds are a great play considering you are investing between a stock and a bond.  A preferred acts as a stock in the way it can go up or down.  However, like a bond it can pay a high dividend that can provide an income stream. You can find some really good companies yielding a 7-10% APY.  These dividends are negotiated and do not change or fluctuate over time.  In the case that the company preferred you bought goes belly up, you are obligated to receive payment before "stock" shareholders. Preferreds sell at $25 (considered par) and have a call date usually 5 years down the road.  Some preferreds have a "call" structure built in... so be aware.

Note: Preferreds carry a risk rating by standard & poors, fitch, and moody's

Notable Preferreds:

JPMpI, GEG, GSpB