Monday, August 8, 2011

Market Reacting to Declining Growth Not S&P Downgrade

As I have written extensively since August 3rd, the stock market is reacting to the problems and data confirming that the United States, Europe, China, and the Global economy is slowing down significantly.  The market is not reacting to the S&P downgrade of United States debt, which was not economically warranted and was based on political perceptions and a corporate agenda. 

If the stock market was reacting to debt problems, bond prices would be declining as well as equity prices.  That is not happening.  Bonds are stronger today while the stock market is showing the weakness of being overvalued in a global and national economy of declining growth.  We have warned readers, newsletter recipients, and clients about the overvalued market and growth problems for an extended period of time. 

Those who have not planned for investment growth consistent with risk tolerance, age, and quality of life needs with an individualized defensive growth diversification and limited losses on ETFs and stocks did not listen to me or did not take my advice.

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