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Last week, I wrote an article entitled the Ultimate Prepper which talked about basic necessities to have during a natural disaster. This past Sunday, San Francisco experienced a 6.1 magnitude earthquake sending over 160 people to the hospital and leaving 7,300 without power, and damages estimated to be as high as $4 billion.

For the people going through the event, it really did feel like the end was here.

“Everything and everyone in Napa was affected by the quake. My house, along with everybody else’s, is a disaster. It looks like somebody broke in and ravaged the place, room by room,”  – said CNN iReporter Malissa Koven, who was awakened by the shaking at about 3:20 a.m.

The violent feeling of the shaking at the epicenter was described by one witness as a shaking she never could have imagined. Living in earthquake country, these people in the San Francisco area were hit with a natural disaster that no one could control. The truth is, everyone could have anticipated it and done their best to be as earthquake prepared as possible. My condolences are sent to the families that were physically, emotionally, and financially impacted by this large earthquake.

Real life natural disasters are reminders that events do happen and preparation never hurts. Bloomberg released a story looking at the top five cities that are most vulnerable to earthquakes and the cities include:

  • Osaka -Kobe, Japan impacting 14.6 million people potentially.
  • Los Angeles, California, impacting 14.7 million people potentially.
  • Manila, Philippians, impacting 16.8 million people potentially.
  • Jakarta, Indonesia, impacting 17.7 million people potentially.
  • Tokyo, Japan, impacting 29.4 million people potentially.
All over the world, seismic activity is on the rise. That means that the shaking in California (and in much of the rest of the world) may soon become much worse.

My Thoughts On The S&P hitting 2,000…

Allow me to switch gears for a moment and get into the stock market. Everyone who has been missing out on the stock market rally, and the blue chip companies that have been hitting new highs. This is all because of a conviction that limits them only to investments that bets against the U.S., and the biggest powers around the world that have been making poor long-term investment decisions.

The big thing causing people to justify their lack of action lately, as to why investing in stocks is a poor decisions, is because corporations are buying back their own stock. Companies purchasing their own shares represent the single biggest category of stock buyers today, according to a study this month by Jeffrey Kleintop, chief market strategist at brokerage firm LPL Financial. Companies have spent $598.1 billion on stock buybacks last year, according to Birinyi Associates in Westport, Conn. That was the second highest annual total in history, behind only 2007, Birinyi calculated. The pace picked up in the first quarter of 2014, when companies spent $188 billion, the highest quarterly amount since 2007.

It makes sense that companies go ahead and reinvest in their company, rather than buy treasury bonds or something else that are paying relatively nothing since they could potentially get 7-15% on their money just investing in themselves. This is a huge objection, and it has become something for everyone on the sidelines to hold on to as moral support to justify their actions for not being proactive. To me, there is always going to be some sort of objection as to why something should be acting in the opposite manner, and this noise definitely needs to be discerned.

What I have found is that the noise from the mainstream media, and the conspiracy guys are both likely to cause you to lose money. I cannot tell you how many times it has paid off having a level headed approach to my investments. Being able to stick things out, and then really understanding the big picture, and remembering who is in control will be a good indicator for you as to where the money is going to continue to go.

It doesn’t surprise me that we are seeing the S&P hitting 2,000 and continuing to gain. This sort of exuberance has the potential to continue on. My caution would be for those looking in the short-term to retire, and convert their investments to fixed income if you aren’t already receiving dividend checks from stocks. If you own great companies that pay solid dividends, price volatility might not be a concern for you since you could live off of the income portion solely.

Volatility doesn’t scare me too much in stocks because as long as you wait it out, time will likely correct a mistake that someone might make in the short-term. To be quite honest, I enjoy pullbacks in the markets much more than the short-term high I get from seeing stocks hit new highs. This is because I understand corrections as buying opportunities, just like we saw a couple weeks ago in the stock market.

If you can accumulate during the pullbacks, your upside will compound much quicker.

Prosperous Regards,
Kenneth Ameduri
Chief Editor at CrushTheStreet.com

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