2008 has been a very difficult year for investors. And most are eager to put it behind them while hoping for a better 2009.
I don’t have a crystal ball. But I believe there are five powerful trends that can destroy or enrich your portfolio next year …
Powerful Trend #1 —
The U.S. Stock Market Is Headed Lower. A Lot Lower …
I don’t believe we’ve seen the last of the exploding, financial time bombs.
What’s more, I expect:
- Real estate prices will continue falling,
- Unemployment will continue rising,
- Our economy will continue contracting, and
- Our stock market will reflect the deterioration of those long-term, systemic economic woes.
The Dow Jones Industrial Average is below 9,000. And I believe the Dow could lose SEVERAL THOUSAND more points before it finally bottoms.
Your opportunity: Selling on strength is my #1 recommendation for 2009. That means taking advantage of rallies to pare back your U.S. stock holdings.
Powerful Trend #2 —
The U.S. Dollar Is Headed Lower. A Lot Lower …
The cost of bailing out our county’s financial institutions alone will be at least $5 trillion. And that’s just the beginning of the trillions of dollars in loans, grants, guarantees, and other programs being cooked up!
So our politicians have a whole lot more spending to do. Those humongous spending plans, combined with our already swelling budget deficits, make the U.S. look like an irresponsible spendthrift to the rest of the world.
Smart international investors do not want to hold what will become devalued dollars. And one of the best moves you can make is to diversity into non-dollar denominated assets.
Your opportunity: Consider international bonds funds, such as the Prudent Global Income Fund (PSAFX) or the T. Rowe Price International Bond Fund (RPIBX).
Powerful Trend #3 —
Interest Rates Are Headed Higher. A Lot Higher …
Inflation always has been, and always will be, a monetary phenomenon where too many dollars are chasing too few goods.
Our national debt is $10.6 trillion and going up by $3.49 billion a day. That’s $34,723 in debt for each and every U.S. citizen.
