Monday, August 07, 2006


How can investors keep a positive outlook when the vast majority of investors are very negative?


The problem is that the media reports the sensational and many of the numbers are manipulated. Take housing inflation as an example. A significant portion of the currently reported inflation rate is due to "rent adjustments". Each time the FOMC raises interest rates, making it more expensive to buy a home, the "rent adjustments" make it appear that for more commentary

Friday, August 04, 2006


A regular reader has asked me to give more detail about the current "rotation". Wow! How many pages does she want?

I'll do a condensed report for now and add to this complex topic in future missives.

One way to categorize the market is by the 9 SPDR's. These 9 indices breakdown the S&P 500 largest stocks into broad sectors. The following list of the nine sectors has the stock exchange symbols posted to the right of the name.

Consumer Discretionary xly
Technology xlk
Industrial xli
Materials xlb

Energy xle

Consumer Staples xlp
Health Care xlv
Utilities xlu
Financials xlf

The above list was put in order by when these stocks do well during a "typical" investment cycle. At or near the end of an economic recession, consumer discretionary stocks lead the dramatic "first leg of the Bull Market". Technology stocks (For more)