Future of the markets

Well, we have lost Ed McMahon, Farrah Fawcett, Michael Jackson and Billy Mays and Bernie Madoff has been sent up the river for 150 years! What is the world coming to?

Global stock markets have been improving since March, though recently they have suffered a slight dip. China and the rest of Asia has had a nice year with up 40+% from the lows. Global markets did originally fall farther than the U.S. market did, so they also need to rise more to get back. The U.S. market seems to be moving in the 8300 - 8700 range on the Dow and can't seem to break out for long in any direction. Small caps (primarily technology) seems to be where new money is moving, with the thought that as business gets better, organizations will have tio increase spending on technology which rapidly advances, but where money has been on the sidelines for the last year. Companies, like a lot of the individuals were not buying much of anything. Except for Apple Computer (AAPL)

Oil and precious metals will occaisionally move, then bounce back down. I had expected higher summer gas prices at the pump (I am currently paying in the mid $2.00/gallon range), and though summer just got started, that price seems to be in a holding pattern as well.

Interest rates have moved up slightly, though there is no immediate fear of inflation. That may be difficult to comprehend with the large outpourings of cash from the federal government with TARP and other programs. It seems certain that President Obama will have to go back on his "no new taxes to the middle class" campaign promise in order to pay for the trillions of dollars of spending.

Government paper is stable, currently at:

1.1% for the 2-year
2.5% for the 5-year
3.5% for the 10-year
4.3% for the 30-year

The markets continue to fluctuate . . .

Since the last blog post, the markets, in general, have not done much - though generally in an upward direction as far as value goes.  In the U.S. the general consensus is the recession will be over by the end of the year.  Oil prices have started back up, and after brief periods of rest at various resistance levels, generally continues to move higher.  It is easy to predict summer gas pump prices (at $3.00) as in many places in the country, we have already reached that mark.  Overseas there are markets increasing and the BRIC countries  (Brazil, Russia, India and China) seem to be a place to focus on for future growth to your foreign investments in your portfolio.

It is still not clear what the auto industry will look like, now that both GM and Chrysler have filled for bankruptcy, and Ford is burning through cash at a rate which would indicate they have less than a year to "live" without a rebound in the economy.  The government continues to bail out certain industries and state issues, though this continuing printing of money is selling us to China!

So, with all of this going on, what am I looking to do for future investments in my portfolio?  My focus going forward, works for me - it may not work for you as you must re-evaluate your risk tolerance and time horizon along with the goal for your funds.  I plan on investing a lot overseas as I see the greatest opportunity for long-term growth.  I will be underweighting U.S. and Western Europe and focus on the BRIC and less developed countries.  The only industries I am focusing on is Energy, Infrastructure and Healthcare in that order.  One can also look at the corporate bond area of the intermediate maturity level for decent yields.

This is what I am doing, what do you think?