I have now spent five decades analyzing business cycles and Fed policy. What do I see today? A crippled economy suffering from way too much big and intrusive government (see Obamacare and Dodd-Frank), the Fed's manipulated interest rate policy, and continued sluggish job growth despite the Fed's torrid pace of money printing. Based on decades of history, what is the probability of a new recession lurking just around the corner?
In this issue, I will explain why a new recession is certainly not at hand and why some key changes in policy would be required to push the economy back into recession anytime soon. I will also explain the bubble condition in the financial markets as well as in corporate earnings. And I will re-emphasize why I look for a continued expansion in the bubble condition. I mentioned the prospect for a collapse last month, knowing that the word collapse lacks a certain appeal for many of you. Well, a collapse is really the only way a bubble condition ends. What is the best course of action for you to pursue in today's speculative markets? Cut risk. Start by eliminating the Netflixes, Facebooks and Teslas of the world from your portfolio. Next, prune back your exposure to the stocks on my Common Stocks Monster Master List that have gone parabolic, starting with the two sells I recommend this month. More >>
Each month, I provide you with an Economic Analysis supplement to the issue. This supplement provides you with a bird's eye view of the indicators that I monitor on a regular basis. The incisive, story-telling charts included in this supplement are updated every month and range from "The Leaders" to "World Currency Reserves/World Gold Reserves." There will always be great new material as well as timely reference dates, and my comments spell out the meaning of each chart for you. Download in pdf format.
December 10, 2013
Lucky you. I get to speak with successful businessmen on a regular basis. Their greatest investment tends to be in their business not the stock market. It's never too late to invest in yourself. I speak regularly with Paul Ewing. He could easily be retired and then some, but instead he and friend David Halley, […]More »
I am a longtime subscriber. I have done nothing but make money with your recommendations, and lost very little. Thank you! Are you still recommending the SPDR Barclays High Yield Bond, JNK?
Yes, I continue to advise a position in high yield bonds. I also favor Ginnie Mae securities, floating rate loans, and short-term investment-grade corporates. Vanguard GNMA (VFIIX) and Fidelity Floating Rate High Income (FFRHX) are my advised plays in the Ginnie Mae market and the floating rate loan market. In corporates, I prefer a mix of individual investment grade and high-yield bonds such as those covered in Young Research's Global Investment Strategy. If you prefer the mutual fund route, I advise Vanguard Short-Term Investment Grade (VFSTX) and the SDPR Barclay's High Yield Bond ETF you mention.
Dick Young grew up in Shaker Heights, Ohio, graduated from Babson College in Wellesley, Massachusetts, with a B.S. in investments, began his investment career in 1964 with Clayton Securities in Boston, and founded Young Research & Publishing, Inc. in 1978 to publish Young's World Money Forecast. More »
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— J. Kandybe