CHESSNOID

Everyone wants to know where the bottom is so they can start buying.  Ideally, you would just put your entire pot at stake and say “all in”.  This would be the easiest way to maximize your return if you were a buy and hold strategy type of guy.  No one can really tell where the bottom is, even though there have been some in the past that have guessed or predicted previous bottoms.

One way to minimize the risk and avoid getting burned is by spreading your buy-ins in monthly intervals. Yes, the returns will be averaged out, but so will your risks.  The market is definitely scary right now.  Yet, I personally don’t think we are at the bottom or near it.  If you are on the sidelines, be patient and wait longer.  Not everyone is pessimistic about the economy yet which means we are not at the bottom.

The economy has a long way to go to recover and I don’t think the new President elect has a plan to get our economy back on track.  I wish the rhetoric being said “lower taxes, create new jobs, and fix the economy” were true but both Obama and McCain are full of empty promises. They both voted for the fraud bailout for the sake of looking like they were doing something. Pandering for votes is not change or promises we can believe in. It is simply pandering and the economy doesn’t care if you are Democrat or Republican. We have a housing crisis that literally grows into more foreclosures everyday, while we are handing out free money to failed and corrupt companies.  This will not increase the GDP nor does it represent true productivity that will contribute back into the economy.

Will the DOW bottom out at 8,000?  I don’t think so.  7,000?  Probably not. 6,000?  Maybe. It is truly going to be an ugly year for the new President and the economy.