Making Sense Out of Crazy Markets

Stock markets have been particularly hard to figure out during the past few months, with their
roller-coaster performance. One day, they’re up 200 point, and the next day they’re down points.
There are two major factors I see involved:

1. First, economic news is very contradictory. On the one hand, many companies are reporting record profits, while at the same time the housing market continues to deteriorate and jobless claims are rising. Many U.S. companies on paper are doing better than ever, thanks to outsourcing of jobs (which cuts labor costs), growing foreign sales (aided by a weak dollar), and tight inventories.

On the other hand, many U.S. workers — particularly those with large debt — are discovering that their finances are deteriorating. This contradictory economic news is causing investors to quickly take profits, whenever stocks rise appreciably.

2. Very jittery investors. Increasingly, investors are aware that serious problems could quickly cause our economy to go into recession. Big problems including deteriorating housing
markets (which include many European countries), and more fundamental economic problems in the U.S., including the soaring cost of debt, faltering economic growth, and increasingly-tight credit requirements. Investors realize that those problems could cause the economy to fall into
recession in the next 6-12 months, and send stocks tumbling. At the same time, for now, there are still excellent profits being made in many stocks.

In a sense, investors are on a razor’s edge, vacillating between bull and bear.

What Crazy Markets Mean For You

In view of continuing, huge fluctuations in the market, we have the following advice.

First, limit your exposure in stocks by investing no more than 30-40% of your money in stocks. Also, take interim profits on your positions, by selling 1/2 when they are up 30% or more.

Second, keep another 30% of your investment dollars in cash or cash-equivalents, such as strong
foreign currencies or short-term bonds.

Third, keep 10%-20% of your funds in gold and silver. They should soar next year. I recommend that you own both bullion coins, and for large amounts of savings — Perth-Mint Certificates — in which your gold and silver are held in depositories in Perth, Australia. (www.perthmint.com.au)

Fourth, for the possibility of some very large profits, open a commodity and currency options account. There are no guarantees, but in September, our average Intelligent Options currency option recommendation was up 389%, turning $10,000 into $48,900 in 30 days. Our top-performing Australian dollar calls were up an incredible 1,580% in five weeks, turning $10,000 into $168,000 (now our all-time, top-performing option). Call 1-800-297-8288 to order or for questions call 1-707-746-8796 and ask for Jim Elwood.

A minimum of $10,000 is required to open a commodity and currency account, and $20,000 is
preferred. The required paperwork also take a few weeks to process before your account is functional.