Market Update – February 12, 2014

Wednesday, February 12, 2014 | 4 Comments

With the worst of the 2014 market correction now a few percent behind us, many investors have calmed down a bit. However, there are some that still think the next “big bad market crash” is already underway. After all, it was the largest drop in US Stocks in about 10 months.

In today’s Market Update I show if this is really something to worry about.  I also show how balanced investors (those that didn’t give up on bonds) have been nicely rewarded the first 6 weeks of the year.

If you have any questions or comments, feel welcome to use the comment feature below this post. If you have any friends that are freaked out about the markets and could use some simple charts to make them rest easier, please share this via the “social share” icons below too!

Best,

Jason Wenk

In Investor Education Market Update | |

4 Comments to Market Update – February 12, 2014

  • Justin Bilyj

    You better buy gold bud, base cost now to produce is $1,200, if it drops below that price, it becomes impractical to mine, further driving prices high.
    With a 7% gain within the year already, its poised to jump above the 100 Moving Average and break-through above the 200 Moving Average.

    I like to invest in the holy trinity of metals; Gold, Silver and Lead (to defend the other two).

    • Jason Wenk

      Thanks for the comment Justin.

      We last owned Gold when it was around $1,600/oz – so we’re pretty well ahead on getting out when we did. Right now the price is potentially rebounding, but still in an intermediate term downtrend. Until that reverses there is simply more potential risk than reward at current values. If the recent low is tested and gold holds, then a new longer term rally could be likely. Until that happens though, our models will stay away. By following our Tactical Asset Allocation Updates you’ll be able to know when we re-enter the market (transparency).

      Cheers,

      Jason

  • Justin Bilyj

    Have you jumped on the bandwagon yet for gold and silver?

    You should watch this blog, too much wisdom to ignore http://www.zerohedge.com/contributed/2014-02-19/how-high-will-gold-stocks-fly
    “The evidence supports what we have been saying for weeks: when gold leaves the station, the train cannot be stopped!

    Meanwhile, the chart reflects a YTD return of almost 10 percent for the precious metal. This happened in less than two months, while gold spent almost a year to drop back by 30% in 2013.”

    • Jason Wenk

      I wouldn’t get too excited Justin 😉

      If you start with $100 and lose 30% you are left with $70. If you then make 10% you’ve made back only $7, and are still down $23 (or 23%). Gold, or any investment that has been a big loser for over a year for that matter, should be avoided until the downward trend has clearly been reversed. This still hasn’t happened, so it’s best to avoid the entire roller coaster ride.

      Perhaps in the coming months our models will determine Gold is a good fit. For now, we’re happy to have avoided the 23% loss.

      -jw

Leave a Reply

Your email address will not be published. Required fields are marked *