With a bad ending for stocks in 2007 and a weak economic outlook for 2008, we have been advising our members to maintain a conservative stock portfolio and to also utilize a high yield online savings account. Until we see an improvement in the US economy we feel it’s too risky to be fully invested in the stock market.
The best investment for 2008 is to park your cash in a high yield online savings account, at least for the first quarter of 2008. With all the currently stock market risk we think you have a much better chance of loosing money in the stock market during the first quarter of 2008 then making money. With odds like this it’s a much better idea to park money somewhere with a guaranteed 5% return.
Be sure to see our full list of investment recommendations in the Market Flavor Portfolio!
Comments (4)
All of the bad news is accounted for in stock prices. Expect a big rally in 2008! Don't get stuck in a savings account.
Posted by Anonymous | December 31, 2007 4:09 PM
Sure all of the current bad news might be priced in stocks but there is no way to tell if the bad news is over. The economy could stabilize or we could be on the verge of a recession. Because the risk of recession has been growing higher, we think the conservative approach is the best investment strategy for the current economic situation.
Posted by Market Flavor | December 31, 2007 4:16 PM
In regards to the Stock Market hitting an all time low, or as many put it, a Crash: I wish to make the following comment;
It is such statements that the media and influential opinions that will cause the market to fall, though I only invest on the ASX, it is easy to predict that though the Australian economy is actually doing very well we may see a fall if such statements as "With a bad ending for stocks in 2007 and a weak economic outlook for 2008" keep being circulated. Its like Chinese whispers, before you know it is blown out of proportion, if the market crashes to a major low, all I can say is "you were subject to more influential bullshit.".... When will people ever wake up, America may be having dramas, But Australia is not America, thank God for that. Its like another Y2K outlook, all doom and gloom, come on investors Harden the Hell up, stop letting others dictate the future of our Country.
Posted by Drew | January 2, 2008 7:43 PM
You bring up a great point that although the US stock market doesn't look so hot it doesn't mean that other stock markets are going to follow the same fate.
The slow down in the US does seem to be spreading to other countries as some foreign banks seem to be tied up in the US subprime mess. We are also waiting to see how a possible slow down in US demand will effect other countries. As US investors we would rather be conservative until markets react to the continued slowing in the US economy.
Posted by Market Flavor | January 2, 2008 8:11 PM