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Thursday, February 23, 2012

Charting the Global Bull

Doug Fabian's

Making Money Alert

Wednesday, February 22, 2012

In This Issue:

Charting the Global Bull
» Not Out of the Greek Woods Yet
» ETF Talk: Ride the Market's Rise with DIA
» Are You Ready for The Ultimate Income Strategy?
» On Optimism and Letting it Be

By: Doug Fabian | Editor, Successful Investing | President, Fabian Wealth Strategies

Charting the Global Bull
Equities continue to march higher and, admittedly, it's a trend that I didn't think was going to turn out the way it has. In fact, I recently told listeners of my Monday Morning Market Outlook podcast that I've been wrong about the markets so far in 2012, and that the strength we've seen in stocks has been something that I didn't anticipate.
Now, technically speaking, the major U.S. indices now trade well above both their 50- and 200-day moving averages. However, it's not just U.S. markets that have powered higher in 2012. If we take a look at the chart below of the Vanguard Total World Stock ETF (VT) -- a fund pegged to the price and yield performance of the über-broad FTSE Global All Cap Index -- we see that this measure of the global markets also is trading above its 50- and 200-day moving averages.

In fact, the movement of the 50-day average (blue line) now is nearly breaking above the long-term, 200-day moving average (red line). If this takes place, we will have seen what technicians call a "golden cross," which is a very bullish pattern that generally leads to more technical buying -- and significantly more upside.
Yes, the technicals in this market are sound. However, when it comes to fundamentals, it's a whole different story.
As we've seen with Greece, the European debt bubble continues to fester under the global economy's skin. Ireland, Italy, Portugal and Spain are next, and how this debt bubble ends up is going to have a serious impact on equity prices in 2012. As for the U.S. economy, we've seen some growth of late, as well as some improvement in the job market, but this growth is by no means strong enough to keep fueling an equity rally indefinitely.
Ask yourself this question -- if the U.S. economy is so strong, then why has the Federal Reserve pledged to keep interest rates at near-zero levels through 2014?
The point here is that I see a major disconnect between the technical action taking place in this market and the underlying economic fundamentals. The former indicator is screaming bull, and the latter one is yelling out bear.
So far in 2012, the fundamentals virtually have been ignored. But how long can the market turn a blind eye to the weak foundation on which this rally has been built? The answer is most likely not for very long. Of course, nobody knows how long stocks can sustain their bullish ways, but I know I am not interested in trying to jump on this bull's back.
History tells us that when everyone is bullish, and when stocks have rallied out of step with the fundamentals, that's the time when many investors get unceremoniously bucked-off.
I recommend not letting this unfortunate fate happen to you, or your money.

Not Out of the Greek Woods Yet
After seven months of difficult negotiations, Greece finally has won the 130 billion euros
in aid it needs to avoid the dreaded March bankruptcy. But that by no means is the end of this Greek tragedy. In fact, now that the bailout deal is done, investors already are weighing the prospect of a possible violation of the terms set forth in the current bailout deal.
Despite the new round of funding, Greece runs the risk of not being able to successfully implement austerity measures that would slash the nation's debt to 120.5% of gross domestic product (GDP) by 2020, which would be down from last year's dangerous 160% debt to GDP level.
If Greece fails to make the required cuts in its pensions, in the minimum wage, in health-care and defense spending, and in government-employee budgets, the danger of default will ramp up to red-zone levels. Such a move could take a serious bite out of the value of the euro, of European equity markets, and even of global equity markets.

I'm actually expecting the Greeks to fail on this front. Although I wish them well in their herculean austerity efforts, I just don't think the political will or fiscal acumen is there to get the job done.
Now, in the chart above of the Global X FTSE Greece 20 ETF (GREK), we see that stocks in the troubled European nation surged in January on optimism over the bailout deal. However, since the bailout was announced, Greek equities actually have dropped sharply.
This price movement is telling, as it shows that the smart money isn't convinced we're out of the Greek woods yet. I agree.

ETF Talk: Ride the Market's Rise with DIA
If you are hoping to profit from the market's recent run-up, consider buying an exchange-traded fund (ETF) that gives you exposure to some of the best-established companies available. One way to do so is by investing in the SPDR Dow Jones Industrial Average ETF (DIA).
The fund seeks to provide investment results that, before expenses, generally correspond to the price and yield performance of the Dow Jones Industrial Average. Without question, DIA has been on a roll lately, as the following chart shows.

As of Feb. 21, DIA's top sectors and their respective weightings are: industrials, 22.27%; information technology, 17.6%; consumer staples, 13.53%; energy, 11.37%; and consumer discretionary, 11.02%. As far as the fund's top five individual holdings and weightings on Feb. 21, they consist of: International Business Machines, 11.28%; Caterpillar Inc., 6.71%; McDonald's, 5.86%; 3M Co., 5.11%; and Exxon Mobile Corp., 5.05%.
On Feb. 12, DIA closed at $129.23 per share, after paying a dividend of $0.332. The last time the fund topped that level occurred on May 19, 2008, when the fund closed at $130.23 per share. The ETF's rising share price may have been aided by positive fourth quarter and full-year 2011 results from Home Depot, Inc. (HD) and other companies that are doing well during a weak economy. Indeed, HD is DIA's 16th largest holding, as of yesterday's close.
The world's largest home improvement retailer reported on that day that it notched sales of $16.0 billion for the fourth quarter 2011, a 5.9% increase from the fourth quarter of 2010. Comparable store sales for the fourth quarter of 2011 jumped 5.7%, and comparable sales for U.S. stores alone rose 6.1%. Also impressive is that Home Depot's 2011 sales reached $70.4 billion, up 3.5% from 2010. In addition, the company's comparable store sales for 2011 climbed 3.4%, and comparable sales for U.S. stores alone rose 3.0%. It seems apparent that the do-it-yourself market is on the ascent, amid economic weakness in other sectors.
Home Depot also announced on Jan. 20 that it had acquired Redbeacon, an online home services platform that connects consumers with contractors for their home maintenance, repair and remodeling needs. Based in San Mateo, Calif., Redbeacon assists homeowners in connecting with qualified local service professionals, so Home Depot now seems better positioned to compete for the business of online buyers to sustain its sales growth. Since people generally look for ways to save money in a weak economy, Home Depot is an example of a company that can grow in both good and bad times.

With DIA's diversification, you can benefit from its holdings in stocks such as Home Depot, without risking all of your money on the fortunes of just one company. That benefit is a clear advantage of using ETFs.
If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my ETF Trader service. As always, I am happy to answer your questions about ETFs, so do not hesitate to email me by clicking here. You just may see your question answered in a future ETF Talk.

Are You Ready for The Ultimate Income Strategy?
"You have to make your money work for you."
We've all heard this old adage and, to be certain, it is the key to income investing success. And while the truth of this statement can't be argued, it's definitely a lot easier to say than actually to do.
At Fabian Wealth Strategies, we take the concept of making your money work for you very seriously. But what does it actually mean to have your money working for you, and how can we help you achieve that noble goal?
Answering these questions is what our new report, The Ultimate Income Strategy, is all about.
As a fee-only investment advisor specializing in helping clients preserve their capital while also generating the income they need to live the life they desire, we take both of these objectives extremely seriously. However, conventional Wall Street wisdom usually pits the twin objectives of capital preservation and high income generation at odds.
According to the official party line, you either can A) preserve capital by sticking your money in "safe" investments that offer a pitifully low yield, or B) put your money at risk in dividend stocks and other high-yield equities and be willing to wait out the inevitable market declines that are inherent in these kinds of securities.
Well, we think this conventional wisdom is flawed, and we know there's a better way to manage your income assets. You see, instead of the either-or choice of safety vs. yield, we've developed a strategy designed to maximize income, while at the same time managing the various risks inherent whenever you put money to work in the market.
We call it our "Ultimate Income Strategy," and when you're finished reading this report, you should have a good sense of how the strategy works and, more importantly, how it allows your money to work for you.
If you've been trying to generate high income but have failed to keep your money safe from volatile market swings, then this report is aimed straight at you.
In The Ultimate Income Strategy, you'll discover why the right mix of income-generating assets -- along with the expertise to navigate in and around changing market conditions --are two key components of a truly successful income program.
By downloading this FREE special report, you'll find out the secrets of how we manage an income portfolio to deliver the capital preservation and high yield every income investor is after.
So, take the ultimate step, and download your FREE copy of The Ultimate Income Strategy today!

NOTE: Fabian Wealth Strategies is a SEC registered investment adviser, and is not affiliated with Eagle Publishing.

On Optimism and Letting it Be
And when the night is cloudy,
There is still a light that shines on me.
Shine until tomorrow, let it be.
--The Beatles, "Let It Be"
No matter how down we may be in life, we still can find a light that shines on us. If you have your reason, and the will to act in your own self-interest, you can shine until tomorrow -- not only for yourself, but for those you love.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you'd like me to share with your fellow Alert readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Click here to ask Doug.

Sincerely,

Doug Fabian

Offline Promotion Strategies 101

Here's today's feature article: Offline Promotion Strategies 101

No business can survive the long run without some form of consistent advertising. As a result, most business owners will eventually consider using advertising to promote their business.The toughest part of the advertising equation is in determining where and how to spend your advertising dollars. If you do it wrong, you could plunk down your entire advertising budget and receive absolutely no return on your investment. But, if you do it right, your advertising could continue to bring a nice return for years to come.

HOW DO I MAKE THE RIGHT ADVERTISING DECISIONS
In order to make good decisions concerning how to spend your advertising budget, you must first have a good understanding of the different types of advertising and promotion available and what can be expected to be achieved by each.
· You must understand which markets the different media`s can reach.
· You must understand the demographics of the media`s consumers.
· You must understand the buying habits of the consumers reached through the media.

WHAT OFFLINE ADVERTISING & PROMOTION MEDIA`S SHOULD BE CONSIDERED
The media`s that people think of most often are television, radio, newspaper and magazine advertising. Of course, these are the big boys that big businesses use regularly.Other methods of promotion include trade shows, press releases, direct sales, telemarketing, word of mouth, branding and billboard advertising.

CONSIDERING THE BIG MEDIA OUTLETS
The big boys of advertising media`s generally cost big bucks. Given certain circumstances, the big media`s can be bought for very little money. Take for example, television, radio and newspapers cost big bucks during their prime times, but can be bought for pennies on the dollar during non-primetime hours.Television primetime is between 7pm and 10pm. Radio primetime is between 7am and 6pm. With newspapers, the primetime is Wednesdays and Sundays.If you intend to hit a media during prime time, get ready to drop some bucks. Primetime means that you will be able to hit more consumers during these times. So, in most cases, a primetime buy will enable you to reach more people with your advertising. Non-primetime hours can still deliver a lot of eyes and ears to your message, and sometimes, these off-hours can be bought for a
bargain basement price.

GETTING MILEAGE FROM EVENTS
Trade shows and press releases are more event-driven. The trade show is the event, while the press release generally exploits an event. Trade shows are an exceptional tool when you deal directly with potential sellers of your products or services. Other shows are directed at the consumer, and those can be very valuable avenues for sales as well.The press release is aimed towards gaining attention for a business by distributing newsworthy information about the business.Sometimes the appearance of a business at a trade show or other show can provide the necessary angle for a press release. But most often, a successful press release will actually require more noteworthy information than the appearance of a business at a show.Yet, even the most mundane of information could be spiced up to give the real air of importance necessary to get your press release read and printed.The great thing about a press release is that might permit you to get relatively inexpensive promotion on television, radio, newspapers and magazines; for far less than what it would cost
you to buy advertising in those same outlets.

UTILIZING A SALES TEAM
Depending on what type of business you run and the consumers you are trying to reach, you might find direct sales and telemarketing to be very lucrative ways to drive sales to your business. Both are very similar in nature. Direct sales can be very expensive, as it requires a great investment of time to accomodate. Telemarketing seeks to minimize the time expenditure, but it often leads to a smaller degree of respect
and attention. Depending on your product or service --- and always depending upon the people you employ to the task --- each method will be more suited to each business on an individual basis.

BRANDING YOUR BUSINESS
I grouped branding and billboard advertising together in my original list for a reason. I did this because billboard advertising serves most businesses best by helping to support the process of branding. Branding is the process of establishing your business as the supplier of a certain product or service, or in emphasizing a
certain USP (Unique Selling Proposition) as it pertains to your business. If branding and USP seems to be a confusing concept, think about Wal-Mart and their tag line: "Always Low Prices, Always."Think about Ford Motors, "Quality is Job One."Think about the Visa Card, "It`s Everywhere You Want To Be."You see, these top corporations have managed to make their USP part of their branding.Even if you are only competing in a local marketplace, your USP can and should fit snugly into your branding strategy.

NO MATTER THE MEDIA OR METHOD
Whichever method or media you should choose to employ in your advertising and promotion, you should become knowledgable about your market, and the consumers reached by each media. It is important to understand which consumers can be reached by a certain media, and in what quantities.However you choose to spend your advertising dollars, you should always track the results of your promotional efforts. Failing to track successes and failures will ultimately lead to the failure of a business.When you know whom you are trying to reach and how you think you might be able to reach them, you will begin to learn how to use advertising and promotion to make your business successful. That is a good thing --- after all, that is why you got into the business in the first place, isn`t it?

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Quote of the Day:
"Fortune favors the brave." -- Publius Terence

Sincerely,
John W Burke
http://www.johnburkelive.com

Increasing Your Wealth Without Unnecessary Risk

Total Transparency

If you've ever wondered whether investment gurus follow their own advice, then you're going to love today's guest article from Mark Ford, who shows you exactly what happened when he put his skepticism aside and starting following a new Palm Beach Income approach.

Craig Ballantyne

"Transformation can only be achieved through education." – Matt Smith

This Options Program Seems to Be Working...But Do You Understand It?

By Mark Ford

Today I want to update you on my experience with Palm Beach Income, the options-trading program that we introduced earlier this year.

If you were a subscriber back then, you know that my initial reaction to the idea was negative. "Options are risky," I thought. "I don't want to expose Palm Beach Letter subscribers to unnecessary risk."

But Tom was insistent. There are seven ways to trade options, he told me. Five of them are indeed risky, but two of them are actually safe. He showed me data to support that statement. More persuasively, he showed me the results he had been getting on his own account.

The historical numbers were enticing, but I've been fooled by "past performance" before. I told Tom that before I would endorse the service, I'd have to try it myself. I sent my broker $200,000.

The initial results were very impressive. On my first trade, I earned $1,149 after Tom spotted some unusual activity in a key corner of the gold markets. Then, another pocket of the market was expressing some unusual behavior. Within the hour, $454.99 appeared in my account. Last year, on June 22nd, two more transactions led to instant income payouts of $1,689.97 and $909.98. Exactly one week later, on June 29th, I performed this transaction four separate times in a single day and earned $499.99, $499.99, $549.98 and $674.98. Not bad for a day's work. The results were so good that I felt comfortable telling my youngest son to invest the $25,000 he got as a college graduation present into one of these options accounts.

As you can see here, he also had some good results.

So the initial results were all very good. I was almost ready to endorse the program, but I had one concern. Options are complicated. The success my son and I had enjoyed was easy as pie because Tom and my broker were executing all the decisions. I wondered whether PBL subscribers would be able to make those trades themselves. Was it too complicated?

So I asked Tom to do a beta test. He selected one hundred volunteers who spent six weeks learning how to do this kind of trading. What I wanted from the beta test was not a good return on investment–I had already seen that–but testimonials from participants who found the teaching part of the program easy and enjoyable.

Tom designed the teaching program himself. He worked very hard for three months putting together a series of videos that explained the theory and taught the practice. And then he asked for feedback and made changes and adjustments to make the program crystal clear.

The response we received was impressive:

I have found this to be the most profitable and safest investment idea I have come across in my thirty-seven years of investing in the stock market. –Jay DeHee, Frankfurt, Germany

Palm Beach Income was a great course. It starts at the very beginning and takes you through the end where you are comfortable making the trade. The potential extra income is awesome. Tom did an excellent job in teaching. –June Renssall, Midtown, PA

In my twelve years of investing, I have not known a trading strategy such as this one that is both safe and simple to understand... while also generating income. I appreciate that you have shared it. –Ronald Beesworth, NY

I wasn't sure what to expect, but was extremely pleased with the course. Tom and Paul have been refreshingly open and honest and seem to have a genuine concern that I fully understand all the details before I ever make my first trade. Additionally, they did not try to juice up or exaggerate profit gain examples like many trading newsletters do by using numbers based on margin trading that multiply the percentage of gains, yet simultaneously fail to fully explain the risks involved when using margins. So, to sum it all up, I am confident that it will add some sizable extra income to my portfolio over the coming year as we move forward into the next phase of the Palm Beach Income program. –Pam Witherspoon, San Francisco, CA

With a great track record and so many rave reviews of the teaching component, I endorsed the program. We released it to subscribers in December of last year. Since then, everything seems to be going smoothly.

In fact, this program is outperforming all our expectations across the board. As of now, we have closed eighteen trades in our Palm Beach Income portfolio, all of them winners. Our average holding period is eighty days, and the average annualized gains for these eighteen trades is 15%.

But I can't say for sure because I committed one of the cardinal sins of investing. I was too lazy to take Tom's teaching program. I simply told my broker to do the trades for me.

The results have been very good. After six months, my portfolio is up 11%, which translates into a 22% annualized gain. I've got to tell you–this is money I would have put into a bank account. Twenty-two percent is an amazing figure.

But, I still don't know what I should about trading options. I understand the basic theory, but I can't even read the statements that come from my broker. It's nice to be making money–especially twenty-two times what I can get from a bank account–but I don't feel comfortable having my money in places unless I really understand it.

And this brings me to my main point.

I don't want Palm Beach Income to be a service that simply recommends trades. There are dozens of services like that. Some are good. Some are not so good. But even the best ones (like ours) won't work forever all the time.

What's important–in terms of building real, sustainable wealth–is that you understand how these two types of trading work. What's important is that you learn a skill for making extra income that you can use for the rest of your life.

It's like the old saying: giving a man a fish will feed him for one day, but teaching him how to fish will help him for the rest of his life.

I've been making good money with my options account, but I never put in the time to learn how to do it. So, as far as I'm concerned, I've wasted my time and money.

But I'm going to fix that. I'm going to take the course and see if I can learn how to trade. I'm going to see if it is simple and clear enough so that someone like me can really understand it.

My main goal is to make sure Palm Beach Income is worth every penny–for the education you will get about trading, not just for the investment picks. As I take the program, you can be sure I'll be giving Tom and Paul my feedback. I will make sure that everything is crystal clear and easy to follow.

Making money is great, but if you don't understand how you make it, what good does that do you?

I want Palm Beach Income to be a service that will teach you how to fish income out of the options stream for the rest of your life.

Best, Mark

Total Transparency

This Options Program Seems to Be Working...But Do You Understand It?

A New American Dream

The average U.S. 401 (k) account hit a record US $74,900 at the end of March 2011, up 12% from March 2010, according to Fidelity Investments. Most of the growth came from rising stock markets while the remainder of the increase was due to an increase in employee contributions that have increased after the financial crises of 2008. Still, it's not nearly enough to retire on. In fact, many experts suggest it's only one-tenth the recommended level of retirement savings for living the American Dream. Fortunately, there are experts like Mark Ford and Tom Dyson out there who are giving practical, and invaluable advice on building wealth. Please print out today's essay – and anything we publish from Mark Ford. It's the best information you'll find anywhere about growing your retirement savings.

Prosperity & Wealth Secrets for the day- Part 8...

Prosperity & Wealth Secrets for the day- Part 7...

Dear,
Again here is a review of the 8 keys and your LESSON for the day...
#1: OWN your own business .
#2: Commit to SPECIALIZED KNOWLEDGE
#3: Discipline Yourself to SAVE
#4: Look for RISK
#5: Become a PROBLEM seeker
#6: Do what you LOVE to do
#7: PATIENCE
#8: FOCUS on a Primary Income and then Diversify

Today's focus is to concentrate on Principle #7: Patience....
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It was 5:30 am on a brisk morning and I sat on my back porch listening to the breeze come off the lake, the quiet calm of the day beginning, birds chirping and the ducks playing...
It was another start to an incredible day. Each morning, I'm reminded of the value of patience,tranquility, and peace...
Whatever your background, it's important to realize that in order to reap the rewards of a fruitful life, we've got to have the right foundation... Whether it's a building, a relationship, a business, your career, or your life, the foundation is critical for massive results.
In the heat of our hustle and bustle with all the possible distractions that overtake us, it's always nice to put things in perspective... It seems that so many people today want the "Jack and the Beanstalk" success story.
My experience has taught me that there is a critical skill that separates those who achieve weal.th, abundance and prosperity from those who don't. It's a skill that is learned. It isn't taught in grade school. It isn't taught in math, and you won't find it in your physics class or even in English lit. It is a skill that is learned. It is a skill that seems to have been lost in our society... It takes practice and it is the quiet calm of "patience". Unfortunately for most of us, we've been brought up in a society that we... "... feed a man a fish we feed him for a day..." however the skill we're talking about is one that "... teach him how to fish, you feed him for a life." Our educational system teaches: Go to work, get paid, don't go to work, don't get paid...It was the farmer of yesteryear, that lived the principle we're talking about living... We can learn a lot from the farmer who plants his tomato seed. If your goal is to have a fully grown tomato plant (prosperous life) that gives you tomatoes for years and years, it's important to have patience...If you plant a seed today, it requires that you water it, pull the weeds, and that you give it sunlight and nourishment. Does the farmer who plants a seed today, expect a full crop by next Friday????? The farmer knows that the foundation is critical... the roots determine the results... Here are a few lessons on patience from the successful farmer...
1. We've got to plant a lot of seeds to have some of them grow.
Not all the seeds we plant grow to be our best crop. The more seeds you plant, the better chance you have to get the crop you want.
2. Plant your seeds in the right place.
If you plant your seeds in the wrong place, no matter how great of a farmer you might be, you won't get the crop you're looking for.
3. You need deep roots.
The deeper the roots the better the result. One skinny root, no matter how deep it goes is unstable and insecure. If a storm comes along with one skinny root, the crop will get ripped apart. Deep, strong roots that spread out are critical for your crop. If a strong wind or a storm comes through, with deep, strong roots your crop can withstand the storm...
4. Pull the weeds.
Weeds can destroy your seeds and crops -- especially in the beginning... Successful farmers are aware of the weeds that can spread like wildfire. It takes no effort to get weeds. It takes awareness to know how the weeds can take over your crop and more importantly a good farmer does a lot of work to protect the land and the crop from weeds. The farmer knows that weeds will come and when they do, it's easy to handle them because of preparation.
5. Specialize and cycle.
Not all soils are appropriate for all seeds and crops. A good farmer realizes what works well in a particular soil, and maximizes their opportunity by planting their best seeds in the soil. A good farmer knows that the soil needs to be "cycled" otherwise their land becomes worthless.
A good farmer can cycle and reap the rewards of their labor by planting plenty of seeds in the right soil, watering it, pulling the weeds, and then maximizing their opportunity... The successful farmer understands that there are many components to a great crop-- some which they control and some they don't. The successful farmer knows that a key ingredient that separates them from the "wannabe's" of the world is the quality of PATIENCE.

What can you learn from the farmer????
Here are a few keys for today: Take a few minutes and imagine that you're a farmer...Imagine that you've been given the task of developing a massive crop- your goals- Take some time to plan for your incredible crop...

What kind of a crop are you wanting to grow???
What are your goals?
What would have to happen in order for you to achieve it? What contacts, resources, and tools would you
need to attract to reach your goals?
What are the potential obstacles that you need to overcome that could stand in your way- temporarily and long term?
Who else can you learn from that can help you get through and to your goals faster?
What special talents and gifts do you possess that you're not using right now?
If money weren't an issue, what would you do with your time for you and your family?
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Prosperity Secret: Take small steps each day to get closer to your goal...
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It's time to reap the rewards of your successful "farm"...
You deserve it. You live it. You know it. Instinctively you posses the qualities to get what you want...
Together we can show you how to get it faster...
If you'd like other simple ideas to attract Prosperity, Wealth and Abundance I've got a spe.cial offer available for you.

Until next time....
Make it a great day!

Blessings,

Dan Kuschell

Monday, February 20, 2012

Prosperity & Wealth Secrets for the day- Part 4...

Dear,
Wealth Building Secrets for the Day!

Again here is a review of the 8 keys and your LESSON for the day...
#1: OWN your own business .
#2: Commit to SPECIALIZED KNOWLEDGE
#3: Discipline Yourself to SAVE
#4: Look for RISK
#5: Become a PROBLEM seeker
#6: Do what you LOVE to do
#7: PATIENCE
#8: FOCUS on a Primary Income and then Diversify

Today's focus is to concentrate on Principle #4: Look for Risk!
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Because of our education system, we have been taught that the key to success is to go to school, get good grades and then get in a big company with stability, security and...benefits.
Although that "system" may have worked for people like our grandparents, its not as effective today, unless you have a plan to back it up. Do you know that the average person will likely change careers 5 times in the course of their lifetime? "Careers" not just jobs. Think about this. How many people do you know that have
a degree in one field of education, and are working in a completely different field than they got their degree in? Things are different for our generation today! Social security likely won't exist for most of us at retirement age-- and or it will be dramatically altered to affect us...

What does this mean for us?
The key is to MAINTAIN a primary income source and DEVELOP a sideline business. Because of technology today we can get things done much faster than ever before and turn our hobby, skill, or talent into a business...My highest recommendation is when evaluating an opportunity instead of our initial instinct which says: "What's the RISK if I do this?" take another look and ask, "What's the RISK if I don't?" Over 95% of people at the age of 65 will either be dead or dead broke- relying on friends, family, or the government
to take care of them...What skill do you have that you could turn into a sideline business? What talent could you share with other companies, organizations, that could help increase their income or save them m@ney?
When we look at what people refer to as their ASSETS and LIABILITIES on a balance sheet, why not take this one step further and take our own personal inventory of "intangible" ASSETS...

What are you good at? What are your TALENTS and STRENGTHS?
When you look at sports, two athletes given the same physical skills, the mental game is the most important of tools...What are your "intangible" ASSETS, gifts, talents and abilities that you could use to JUMP START your career and a possible second stream of income? "Getting started" is typically the hardest place to be for someone, and yet the MOST IMPORTANT STEP. So many people we've studied get hung up on the little things. One of my favorite books, "Don't Sweat The Small Stuff And It's All Small Stuff" really addresses the ISSUE...
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If you knew you couldn't fail, what would you do???
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Take the steps necessary to take ACTION! One of the common misconceptions of most people is that "I
must know EVERYTHING before I get started". This is one of the greatest LIES in business today! Lee Iaccoca was famous for a saying, "The single greatest factor that has cost our country BILLIONS of dollars, hasn't been bad decision, it's been INDECISION." Analysis creates paralysis. As an ex-baseball coach, I found that the kids we worked with would learn more in 10 minutes in the batting cage than ever reading about it, studying, or evaluating it.
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What would you do if you knew you couldn't fail????
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Get out of the bleachers of reading the "program" featuring all the other athletes on the field... It's time to get on the field and play. Like those kids, you'll likely learn more in 10 minutes on the field than thinking,
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02/15/12 Alert: It Begins with a Stall

Doug Fabian's

Making Money Alert

In This Issue:

» NEW! Video Alert
» It Begins with a Stall
» The Three Bears
» ETF Talk: A Chance to Buy into Biotech
» Are You Ready for The Ultimate Income Strategy?
» World Turning

By: Doug Fabian | Editor, Successful Investing | President, Fabian Wealth Strategies

It Begins with a Stall
The 2012 rally that got investors so excited through the first five weeks of the year has begun to slow down. In fact, stocks effectively stalled last week, with all three major indices -- the Dow, S&P 500 and NASDAQ Composite -- finishing in the red for the week ended Feb. 10. Stocks haven't seen much improvement since then, and the trading remains shaky, with investors wondering if the bull that came out of the gates at the beginning of the year is running out of energy.
I suspect stocks are way overdue for a pullback here, and that's part of the reason why I've remained cautious despite the over-exuberant January action. Another reason for my caution here is due to concern about the fledging bailout deal in Greece. The drama continues in Europe, and I think the longer the region's debt issues linger, the more likely it is that money will continue flowing away from the region, and away from risk assets such as stocks.
What I think is the most probable scenario is that this early-year rally will fizzle out and cause things to get dicey. I think we could be on the verge of a strong pullback that's going to send stocks in the S&P 500 well below their long-term, 200-day moving average.
As you can see by the chart here of the S&P 500, stocks have stalled a bit since climbing rapidly to the 1,350 level. Admittedly, the broad measure of the domestic market remains well above both its 50- and 200-day moving averages.

In Europe, we've also seen a nice rally to begin the year. However, the chart below of the iShares Europe 350 (IEV) shows that stocks in the region now are beginning to pull back. Any further downside could lead to a break below the long-term, 200-day moving average.

This is the kind of scenario that could very well take place in U.S. markets, particularly if Europe's recession issues begin to have the kind of negative effect on the global economy that I suspect they will.
The bottom line here is that if you aren't allocated to stocks right now, then I strongly recommend that you steer clear and wait for a more opportune time to get in. If you do own long positions, then make sure you have trailing stop-loss orders in place to protect the gains you've seen through the first part of the year. If my thesis on this market is correct, gains will be increasingly hard to come by in 2012, and that means it's crucial for you to protect and preserve what you have.

The Three Bears
I think 2012 will go down in history as a time when the global debt bubble came to an end. We surely will witness the first of many sovereign debt defaults this year. We also could witness the end of the euro. But most importantly, we will watch the end of easy money. My friend John Mauldin calls the expected conclusion of the debt super cycle the "endgame." It is that point in time when governments no longer are able to finance their promises through deficit spending.
We also will be selecting a new U.S. president or reelecting Barack Obama this year. In either case, the person who gets the job will have to deal with our fiscal dysfunction of $15 trillion in debt, annual deficits of a trillion-plus dollars per year and unfunded liabilities of many trillions more.
This year also will spotlight Europe's grand experiment of economic union. The growing conflict between euro-zone nations seems likely to come to a head. The wild social promises made by politicians and the strict union rules for employment have ruined the economies of Greece, Portugal, Spain and Italy. A great crash is coming and now is the time to get your personal financial house in order so you and your finances are able to survive the havoc that Europe's problems will bring to the rest of the world.
The global economy is slowing but Europe, the largest economic bloc in the world, is going into recession. The results are clear to me; this global slowdown is about to get a lot worse. If we also get bad news out of China, we could be in for another 2008-style global recession.
Take a look at each of the following three charts. I call them "the three bears."

These charts tell quite a story. You see, there are long periods of time when stocks go nowhere. Such instances occur after we have had long periods of outperformance by the indices. The first secular bear in the 20th century followed a period of time called the roaring '20s. The U.S. economy expanded rapidly and stocks screamed higher during 1920-1929. We all know from our history books what happened next: the Great Depression. Stocks fell more than 80% in value. It took more than 20 years for stocks finally to break out to new highs.
Then there was the secular bear market from 1966-1982. This period of time followed the great Eisenhower, post-World War II boom. Once again, stocks soared in the '50s and into the '60s, only to hit a wall in 1966 with the first of two major bear markets in the span of just 10 years. Stocks did not break out until 1982. This secular bear market took 17 years to come to an end.
Now, let's consider the year 1999. This was the end of the '90s, a decade when stocks outperformed their historical average by 70%. Stocks compounded during the decade of the '90s at a 17% annual rate. Add to that situation the decade of the '80s when stocks compounded at 15% and you can see why this current secular bear dragged along for some time. We now are 13 years into a period where stocks have gone nowhere again.
This market sluggishness is no way for us to calculate when this current secular bear will come to an end. But we want to be aware of these long-term trends to make good decisions about managing risk in the years ahead.
In my Successful Investing advisory service, the Fabian family has been helping investors manage risk for over three decades. If you're in a quandary about what to do with your money, then why not check out Successful Investing today.

ETF Talk: A Chance to Buy into Biotech
The biotechnology sector has been rising as quickly as a child’s fever. The key question is whether this suddenly hot sector will slow down or possibly cool off in the coming days and weeks. Part of the answer to that question will depend on the overall movement of the market. With the recent rise in stock prices overall, it understandably leads to doubt that the upward momentum will continue unabated. If you are intrigued enough to buy a biotechnology fund, one that you should consider is SPDR S&P Biotech ETF (XBI).
The fund’s objective, before expenses, is to match the returns and characteristics closely of the S&P Biotechnology Select Industry Index (ticker: SPSIBITR). The exchange-traded fund (ETF) is designed to provide portfolios with low portfolio turnover, accurate tracking and lower costs. If you like fast-rising funds, SPDR S&P Biotech ETF could be just what you are seeking, since it is up 20.4% so far this year through Feb. 14. Likewise, the index has been surging, too. The index is up 20.12% during the same time period. The following chart shows XBI’s impressive climb so far in 2012.

SPDR S&P Biotech ETF held 44 different biotechnology positions as of Feb. 14. Its top 10 holdings, and their respective weights in the fund on the same date, were: Regeneron Pharmaceuticals, 5.56%; Dendreon Corp., 4.74%; Amylin Pharmaceuticals Inc., 4.39%; Medivation Inc., 3.80%; Gilead Sciences Inc., 3.77%; Incyte Corp., 3.62%; Cepheid, 3.52%; Ariad Pharmaceuticals Inc., 3.49%; Alexion Pharmaceuticals Inc., 3.46%; and Vertex Pharmaceuticals Inc., 3.32%.
The pharmaceutical industry is high-risk and high-reward in the development of new treatments for diseases. Big pharmaceutical companies often are enticed to buy smaller companies that are developing promising new drugs to treat conditions that potentially could attract a large and highly profitable customer base. For that reason, biotechnology companies can appreciate in value by developing profitable new drugs, or as takeover candidates.
I am cautious about investing in equities right now, but SPDR S&P Biotech ETF is on my radar screen as a fund to watch in case the market pulls back and offers a better buying opportunity than we have today. The market has produced a big jump in recent weeks, so caution in allocating to new positions seems warranted right now.
If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my ETF Trader service. As always, I am pleased to answer your questions about ETFs, so do not hesitate to email me by clicking here. You just may see your question answered in a future ETF Talk.

Are You Ready for The Ultimate Income Strategy?
"You have to make your money work for you."
We've all heard this old adage, and to be certain, it is the key to income investing success. And while the truth of this statement can't be argued, it's definitely a lot easier to say than to actually do.
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Answering these questions is what our new report, The Ultimate Income Strategy, is all about.
As a fee-only investment advisor specializing in helping clients preserve their capital while also generating the income they need to live the life they desire, we take both of these objectives extremely seriously. However, conventional Wall Street wisdom usually pits the twin objectives of capital preservation and high-income generation at odds.
According to the official party line, you can either A) preserve capital by sticking your money in "safe" investments that offer a pitifully low yield, or B) put your money at risk in dividend stocks and other high-yield equities and be willing to wait out the inevitable market declines that are inherent in these kinds of securities.
Well, we think this conventional wisdom is flawed, and we know there's a better way to manage your income assets. You see, instead of the either-or choice of safety vs. yield, we've developed a strategy designed to maximize income, while at the same time managing the various risks inherent whenever you put money to work in the market.
We call it our "Ultimate Income Strategy," and when you're finished reading this report, you should have a good sense of how the strategy works and, more importantly, how it allows your money to work for you.
If you've been trying to generate high income but have failed to keep your money safe from volatile market swings, then this report is aimed straight at you.
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World Turning
Maybe I'm wrong but who's to say what's right?
I need somebody to help me through the night
World turning,
I gotta get my feet back on the ground...
--Fleetwood Mac, "World Turning"
I think the above lyrics from the iconic rock group often express how we who prognosticate on the financial markets feel. In this game, you're right sometimes and you're wrong sometimes. The key to success is to be right more than you're wrong, and to maximize results when you hit the nail on the head.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you'd like me to share with your fellow Alert readers, send it to me, along with any comments, questions and suggestions you have about my audio podcast, newsletters, seminars or anything else. Click here to ask Doug.

Sincerely,

Doug Fabian