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What To Do?

August 12, 2011 – 5:01 pm

Two reports came out this morning. One is the retail sales report for July and it was a pleasant surprise. It was up .5% and if you exclude the volatile transportation sector it was still up .5%. June’s very disappointing report of up .1% was revised to a better number of up .3%. Later on in the morning the August preliminary consumer sentiment report came in at 54.9 instead of the 63 they expected. That was lower than the lowest number during the recession. That survey was taken just when the our government debt ceiling debate was at its peak and the market was falling. It really is a meaningless report. It does nothing to tell us what the consumer is doing, only what they feel at a particular point of time.

This morning’s market while up a little seems to be calming down, at least for the first hour or so. That could change or maybe the traders are just exhausted after moving prices up and down 4% a day for four days in a row. That has never happened before in the history of the market. That is truly the definition of a roller coaster ride for stocks.

Stocks are cheap, dividends are high and you make nothing in CDs or savings accounts. Holding high dividend blue chip stocks seems a sound strategy to me.

The smart thing to do is do nothing at this point. Let the experts try and guess the next direction on a day to day basis.

Good Trading
Steve Peasley

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