Cloudy Cloudy Crystal Ball,
Can You See The Future?
you have been watching the talk shows, everyone including big
bird on Sesame Street has a crystal ball.
They all know what is going to happen if we pass a budget and
raise the debt limit. Of course they all know what will
happen if we do not.
Everyone who has 5 minutes or less on TV now claims to tell
you what is going to happen. Well no one knows for
certain, but 70% of the companies reporting earnings so
far this quarter are exceeding expectations. This will
ultimately bode well for the market.
If everyone in the world was truly worried about an actual
default, not just a politician saying there will be one to
scare you to their way of thinking, then the market would
have dropped 75 points on the S&P and rates would have gone up
1/2%. Neither has happened yet, so I suspect it does
Just remember some of the prognostications in 2008. The market
would go to 400 on the S&P, oil will be above $200 a barrel,
etc. in 1979, business week reported the "death of equities
(stocks)". Wow, we are up about 1000% since that came out.
Ignore the snake oil salesman and the latest elixir.
These guys went out of business time and time again, because
they put all their bets in one traveling coach. Make sure
your portfolio bears the risk you can withstand and is
Many knowledgeable market individuals believe the market will
go to 1280 level again before moving higher, but it will be a
temporary set back. Ultimately, the dollar will continue to
Everyone in the world knows what is going on in the US and the
markets worldwide have still not fallen off a cliff. That
tells me the bulk of the worry is overdone. It will probably
rise and then fall once they do announce something, because
some will not like the outcome.
Earnings this quarter are still on track to be the best since
2007 prior to the downturn, yet the market is still trading at
a discount to those levels and appropriately so. In fact, many
companies have raised guidance.
The markets are still trading at a bit of a discount to
historical levels, so I still see upside from here, barring
a major meltdown from the budget crisis. I will continue
to diligently watch for any signs of change and we will keep
you up to date.
To read more articles on our web
site click here or go to
www.RebellaCPA.com and click on the Newsletter section.
always you can call me at 714-619-0667 if you have any
questions about investing, retirement or any other tax &
accounting related issues.
Regards, Monica Rebella, CPA
President, Rebella Accountancy