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No Doubt – many pulling money out of the markets:
Bottom Line: Well it’s game on (or off as the case may be). Investors started pulling money out of the stock market last week in anticipation of the political outcome.
All told last week $1.4+ billion came out of the stock market & this week… Well we won’t know until next week but its going to be a substantial number come out of stocks. It’s been somewhat amusing to watch some in the media trying to explain the dramatic move lower this week (as something other than a reaction to President Obama being re-elected). Here’s a stone cold fact. It’s the reason.
I’ve never received so much response from listeners that are afraid of our economic future (not even during the fall of 08’). I’ve already heard from dozens that have liquidated their investments. So it’s not a matter of if that’s happening – it’s simply a fact.
Here’s the more important consideration short term. Quick sharp selling without an imminent positive catalyst – often will lead to more selling. Why?
- Sharp moves lower create additional fear among those on the fence
- Mutual Fund redemptions will require funds to sell to produce cash to pay back investors causing more selling
- Those who use margin get margin calls which often results in selling those positions
- And the computers. Most large investors use stop-loss limits on their investments. That means that if prices fall if can automatically trigger a stop-loss and more selling occurs
So unless there is a pleasant positive catalyst that shows up (perhaps fiscal cliff resolution) we will likely continue to see pressure in the
Dividends as a return in the stock market (and why the fear factor is mounting):
Bottom Line: So one of the taxes expected to rise as part of President Obama’s plan is tax on investment. That includes capitol gains and dividends. The dividend tax rate could rise to 20% from 15% or even as high as 39% (as President Obama has left the idea on the table to tax it as ordinary income).
If these taxes do head higher it does have a longer term negative implication to the markets. It means that return on investment isn’t as good as it once was. That means lower justified prices for those investments (which again isn’t good for the stock market if it occurs).
http://www.cnbc.com/id/49745604
Twitter hacked – what you need to know:
Bottom Line: There was misreporting regarding Twitter yesterday. Originally the word was that now hacking of Twitter occurred and password resets were an accident. That wasn’t the case.
Twitter was hacked yesterday and if you had your account frozen and it’s now asking for your password to be reset - you may have been compromised. Any info you had on Twitter may now be in the hands of anyone so take whatever action is required to protect your interests.
Cheers – Amazon’s bet on wine:
Bottom Line: We’ve become a nation of winos (not that there is anything wrong with that). Amazon is ready to cash in. Amazon.com has launched its own wine section which enables you to potentially package together up to six bottles from a selection of nearly 20,000 options and have them shipped for just under $10.
