A few news topics are of the most importance that I wanted to comment on here. First of all, with first quarter profits this year being released, new fear has sent a shock through the markets which have left people feeling uneasy. Corporate profits are down 6.8% which is the largest slump in profits since Lehman Brothers. Combining this with the fact that stocks are continuing to hit new highs, we can only assume that stocks need to take a breather; in other words, they’re in need of an inevitable correction.
Steen Jakobsen, the Chief Investment Officer of Saxo Bank, boldly stated that he believes a 30% correction is on its way within the next six months. Regardless of the exact reality that will fruit after this significant claim, the higher and faster we see the stock market race ahead, the more room it has to fall. Keep that thought in mind as you decide what to do with your investments and consider trailing stops for your positions.
We’ve been hearing that inflation is at extreme lows and that the Fed is actually concerned about deflation and the effects of what that could have on the economy. Interestingly enough, the Chicago Fed’s actual cafeteria might indicate Main Street better than the “real numbers.” It was released that the Chicago Fed’s actual cafeteria has raised prices between 3% and 33%. I must say I thought this report was so ironic and was a slap in the face to the number manipulation and window dressing that the Fed constantly throws out to save face.
Speaking of Rising Costs
According to an article posted by CNN Money, one of three adults between the ages of 18 and 34 still live with their parents. This age demographic is dealing with rapidly increasing tuition costs, high ACTUAL unemployment, and a cost of living that is drowning the dreams of graduating students. Off the top of my head, I can think of more than five people I know who are graduating from college with over $100,000 in student debt. All of these individuals are planning on moving back home after college. I honestly do wish the best for these people, but I think reality won’t take long to set in, washing away the blind uninformed optimism that got them into this mess in the first place.
Of course I don’t wish the bad on anyone, I see the problems that most people are conditioned to ignore. In a world of billions of people there are going to be opportunities to thrive, there’s no doubt about this. The goal here at CrushTheStreet.com is that people don’t make blind uneducated decisions that cause years of pain and strife.
In every bad situation there is a way to succeed and problem solve. In fact, problem solving in challenging situations in my own life and coming out successful has been some of the most gratifying and fulfilling moments I’ve lived. Understanding the bigger picture has given me a knowledge that’s an advantage in approaching the world we live. I’m conservative yet aggressive; taking into consideration the changing environment to get me the most potential upside for my own future.
I encourage everyone to do the same. When you invest your money, consider the economy for what it is and invest wisely. Understand that the government is flawed in its structure and motives before blindly marching in line with their programs for your life. Most importantly, set yourself up for the best possible outcomes in all aspects of your life and over the course of time, I promise you will trend higher.
Chief Editor at CrushTheStreet.com