Monday, July 6, 2009

Earnings Season!

I used to love the old Bugs Bunny cartoons with Elmer Fudd and Daffy Duck, when they would argue about whether it was rabbit season or duck season. As anyone who follows the stock market knows, it's now earnings season! This is when companies put out their most recent quarterly earnings for the analysts to review and comment. Generally there are surprises. When a company surprises the analysts with good news, it is good for the stock, and when they surprise with bad news, well, it can be bad. Most of the so-called, stock market gurus, are deciding whether we are currently in a "correction" phase, following a recent 40% upswing in the market since March, or whether we are in a more prolonged downward spiral which could test the lows from March, as speculation arises on the lack of strength in the current economy. Many people are questioning if the stimulus package is working and if another one is needed. Some suggest that the effects of the stimulus money are going to present itself in the coming months. Others, like even VP Joe Biden, are wondering if it was enough. The recent volatility in the stock markets suggest that one approach for long term investors might be sector rotation. That is looking at the strong sectors or asset classes in the stock market for possible buys, and selling the weak sectors. This can be a rewarding strategy for those ready to carefully monitor the market aggressively. Many people are pointing to technology as a key sector own right now. As always, if you need help, look for a good coach. Your portfolio should be customized for you. A magazine article or newspaper column can't design a proper strategy for all people, unless you like to follow the herd!

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