Friday, January 8, 2010

End of Week Wrap-Up

The market was pretty quiet this week.  The jobs report came in below expectations, and the market pretty much brushed it aside.  There are plenty of risks out there, but investors are becoming a bit complacent and the risk has shifted.  Earlier this year, there was the risk of collapse and the risk of being in equities.  As the market snapped back, there was the risk of being out of equities.  Now, there is still some risk in being out of equities as there is just no good alternative, but many equities are fairly valued or overvalued based on where the economy is at.  That is why I continue to preach picking stocks and searching for value, and not "buying the market."  There are plenty of opportunities if you're willing to do your homework (or read the right websites!).   I'm doing my best to balance into a group of stocks that are undervalued, while still protecting against a market correction that ultimately will come. 

Earnings are the next catalyst for this market, and they could cause a good-sized breakout to the upside.  Analysts are still on the conservative side with estimates, and companies that have been positioning themselves well in the past quarter will likely blow through estimates.  This we have to be ready for. 

We'll hit it hard again Monday.  Until then, enjoy the weekend.  Should be some good football!

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