Monday, September 07, 2015

Mostly Waiting

There may be one or two more stocks that I will buy in the near term.  But mostly, I will be waiting for a more clear market direction before making any substantial commitment.   The lack of any potential upward catalyst is becoming more concerning.

I expect the Fed interest rate decision to be a negative, either way.  If the Fed raises interest rates, the market will fall.  If the Fed keeps interest rates the same, the market will fall.   It's a no win situation for the Fed.

China looks worse everyday.   In 2009, I believe that China had a much better response to the financial crisis/great recession than did the U.S.   Maybe not.  Nowadays, I believe China is having significant issues in managing their economy and financial systems.   Perhaps this may create a contagion for other economies.

Although Greece is no longer a highlighted issue, Europe's overall economy still seems weak and possibly going into recession.  Emerging market economies are also weak and some are already in recession.

Finally, many previously high flying stocks have experienced their own bear market, declining 20% or more over the past 6-12 months.   Examples include Fitbit, Ambarella, Alibaba, and GoPro,

The only positive I see is that the U.S. economy is still growing and does not appear to be heading towards recession.

So right now, I see more downside risk than upside potential and I will wait before making any large investment of funds.

Disclosure:  At time of publication, we had no positions in Fitbit, Ambarella, Alibaba, or GoPro.

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This is not financial advice. Please consult a professional advisor.

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