Tim,
That's where I am leaning for my high risk speculation.
Stocks in general are overpriced for the risks we face today, and I don't think we'll be able to reflate the bubble, so at best we should be moving sideways from these current valuations. Some industries are now getting bailed out by the government, thus the US taxpayers. The pressure from taxation could become enormous, and I don't see 401K funds benefiting from this trend. Many people have huge levels of personal debt, job loss, and now most likely will be facing much higher taxes.
This leaves me with junk bonds, high yield corporate debt, as my choice of risky speculation.
I think some money will move from mm and lower yielding bonds towards higher risk corporate, instead of going into [at best, fully valued or] highly priced stocks. I also think that the US taxpayer is taking an enormous risk now, as the US government is putting the burden on the taxpayer to cover damages from terrorist activity as well as bailing out industries (not to mention the pressure to upgrade safety at the US Post Office), thereby taking the risk out of insurance and, indirectly, out of doing business in this environment.
This market sure has been tough to call.
E (I also still like gold, especially on this pullback) |
