First Five Days

There is an old adage on Wall Street that states "so goes the week, so goes the month, so goes the year" referring to January. Stock Traders Almanac identified that of the past 36 years, when the first 5 trading days of January were positive, the year was positive 31 of those years for an 86.1% accuracy ratio. The first five days of 2010 were up a net 2.7% so this is encouraging that the current bull run should continue.

However, in midterm election years the First Five Days predictor has only a 60% accuracy ratio. Something to keep in mind.

Quote of the Day

I almost laughed out loud when I read this today

Now, let me get this straight…We are going to pass a health care plan written by a committee whose chairman says he doesn’t understand it, passed by a Congress that hasn’t read it but exempts themselves from it, to be signed by a President that also hasn’t read it and who smokes, with funding by a Treasury chief who didn’t pay his taxes…all to be overseen by a surgeon who is obese and financed by a country that’s nearly broke.

What could possibly go wrong? Anonymous

Hat tip: Dennis Gartman

Your Share of the National Debt

In the first 7 days of 2010, each taxpayer's share of the national debt increased $1375 to $112, 661. Consider that for a moment; in order to pay off the national debt, each taxpayer has to cough up $112,661. That in itself is obscene. Let's now look at that first part again: that each taxpayer's share of the debt increased $1375 in the first week of the year. If the average taxpayer makes $50,000 a year, they earned gross $959 in that same week. So your share of the debt increased at 143% of what you have earned this year. How can we possibly pay off the debt when it is growing faster than what we earn?

I'm not making any partisan political statement here as both parties have been major contributors to the current debt. I am making a statement about what it becoming a serious financial condition. The 2008 crash was a result of too much debt that froze up. There were other contributors, greedy home builders, home speculators, politicians, lenders and banks, but in the end there was too much debt used to prop up an industry so that you had a house of cards. When the first cards began to fall, when money began to freeze up and that debt couldn't be continued, the whole thing collapsed.

What could happen to the economy, the country in general, if the government can't borrow any more money? China is basically propping us up by purchasing all our debt; what would happen if they stop? Something is going to give and I am more and more concerned that it will not end well.

Double Your Money in a Money Market

Happy New Year! It's been a bit since my last post but I was spending a lot time with family and friends for the holidays and didn't have a lot time for posts.

I probably caught your eye with that headline and it's true, you can double your money in a money market account - with today's rates it will take a mere 139 years. That's right, being invested in a money market earning 0.5% interest annually it would take 139 years to double your money. If you are looking to grow your money for retirement, having it invested in a money market fund is not the way to do it long term.