In complex adaptive systems like modern financial markets, a change the price of any one market has ...
Best Buys from the Adens
12/24/2013 8:00 am EST
Our overall strategy this year was to diversify, keeping the largest chunk in stocks and only a small position in gold; we still feel this is a good strategy, suggest Mary Anne and Pamela Aden in The Aden Forecast.
Over the years, when interest rates were low, the price to earnings ratio for stocks tended to rise to above average levels. As such, low interest rates are very bullish for stocks.
And considering they'll likely stay low for, at least, another year or two, this will continue to bode well for stocks.
Seasonal factors are very bullish for the market too. For instance, November through April has historically been positive for stocks nearly 80% of the time, and it looks like the months ahead will not be an exception.
Our technical indicators also remain super bullish. Despite the strong rises we've already seen in the stock market, our indicators are telling us that stocks are not yet overbought.
Stocks have been stronger than all other markets and they pay dividends. In this era of super low interest rates, that makes stocks especially attractive, likely driving them even higher.
There's a good possibility the S&P500 (SPX) could keep rising up to near the top side of its uptrending channel. If so, it could eventually get to near the 3,000 level.
If this seems unreasonable, it's important to remember that good years in stocks, like we've seen this year, are historically followed by further gains the next year, in most cases.
If you're a new buyer and concerned that it's too late to buy, consider buying on weakness. If you want to buy, and or, add to your positions, we'd stick with our strongest stocks, which are: the Powershares NASDAQ (QQQ), the MSCI Germany ETF (EWG), Microsoft (MSFT), and Market Vector Retail ETF (RTH).
For now, the market will remain very strong and bullish with the indexes above these levels: 15,500 on the Dow Industrials, 3,850 on the Nasdaq, and 1,730 on the S&P 500.
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