The markets bobbed and weaved a bit yesterday but Fed chairman Bernanke’s nomination for a second term cheered traders, who are now looking for more economic stability and growth.
I must be one of the few who is not impressed by Bernanke’s resume, especially due to the fact that he never saw the housing bubble and subsequent recession coming, but is now predicting that better times are ahead. It reminds me of the (former Treasury chief) Paulsen speech early last year announcing on several occasions that the U.S. banking system is sound. Yeah right.
If you are not familiar with Bernanke’s recent history, take a look at this video clip on YouTube send in by an anonymous reader.
I continue to be very hesitant in believing that these alleged economic green shoots will ever grow into Redwoods. My investment outlook remains guarded, and all of my positions have clearly defined exit points in place.
Comments 3
Ulli,
What is your recommend exit strategy for a balanced portfolio should a correction occur? I know you recommend utilizing a trailing 7 percent Stop loss order, but do you always wait to be stopped out?
Anon,
Balanced portfolio or not, I always follow my sell stop discipline. If the trend goes my way, I will eventually get stopped out at a profit. If it goes against me, it serves to limit my losses.
Ulli…
Bernanke or no Bernanke (but it looks like Bernanke), your stop loss strategy makes sense. I think we have to know that this market seems to have a mind of its own and is doing what it is going regardless of the news and what is happening. So, ride it, when it is going up, and get out with your stop loss, when it goes down. Makes sense to me, in this nonsensical market