Fiscal Cliff May be Solved before the Deadline

By TraderVox.com

Tradervox.com (Dublin) – US lawmakers will meet today in Washington to discuss the fiscal cliff issue which has shown signs of being averted. Barrack Obama, the US President, and House Speaker John Boehner are discussing the issue in a bid to prevent the spending cuts and tax increases from taking effects. Obama sounded conciliatory when he made his first comments in Daimler AG plant in Michigan yesterday since meeting with Boehner on December 9. The President indicated that he was ready to come to agreement on the issue.

According to Julian Zelizer, who is a professor of history and public affairs in New Jersey at Princeton University, there has been an obvious change of tone from both the President and the office of the House Speaker. Julian indicated that it is possible the president is preparing his party for a possible deal to avert the crisis. There are private talks that have been going on between the Obama administration and Boehner’s aides, but there has been an outcry from both sides in the media that the other should give in first. Members of congress are now waiting for Obama and Boehner to agree and they will decide whether to pass it in congress or not.

Michael Steel, Boehner’s spokesperson and Ohio Republican said that they are waiting for the president to identify the spending cuts he is proposing as part of the balanced approach he promised Americans during the election. The president and Democratic lawmakers have continued to insist that Republicans accept higher tax rates for the high-end earners before proposing spending cuts. Talking at the Daimler AG’s Detroit Diesel unit in Michigan, Obama noted that he was pushing to have the agreement reached as part of his economic growth, deficit reduction and creation of job plan. The fiscal cliff threatens to push the world’s largest economy into a recession if it is not averted.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
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“Massive, Open-Ended Stimulus” Expected from Fed, More QE “Could See Gold Rally”

London Gold Market Report
from Ben Traynor
BullionVault
Tuesday 11 December 2012, 07:30 EST

THE WHOLESALE gold price rose to $1712 an ounce Tuesday morning in London, a few Dollars above where they started the week, while stocks edged higher and US Treasury bonds fell ahead of tomorrow’s Federal Reserve policy decision.

All-but-one of 49 economists polled by news agency Bloomberg predict the Fed will buy US Treasury bonds in addition to the $40 billion per month of mortgage-backed securities purchases announced in September.

“It’s going to be massive and open-ended in size,” says Deutsche Bank’s chief US economist Joseph LaVorgna.

“[Fed policymakers] view this stimulus as what’s needed to sustain the economy,” agrees John Silvia, chief economist at Wells Fargo.

“If the Fed comes out with $45 billion of bond purchases [as some analysts have suggested], it could be the spark we need for another gold rally,” says Matthew Turner, precious metals strategist at Mitsubishi.

“Previous episodes of quantitative easing have seen a gold rally. The policy should increase inflationary expectations, and gold acts as a hedge against inflation.”

“People have realized that what the Fed has been doing is damaging to price stability,” adds Dominic Schnider at UBS Wealth Management, citing strong gold coin sales from the US Mint last month.

The Federal Open Market Committee may on balance become more inclined towards accommodative monetary policy in 2013, Reuters reports, when Chicago Fed president Charles Evans and Boston Fed chief Eric Rosengren become voting members.

Elsewhere in Washington, “there is no deal of anything like it” on the so-called fiscal cliff, according to a Republican leadership aide quoted by Reuters, following further negotiations between the White House and the office of House of Representatives speaker John Boehner Monday.

Silver meantime hovered just above $33 an ounce Tuesday morning in London, in line with where it started the week, as other industrial commodities edged higher.

Over in Italy, prime minister Mario Monti has followed policies “that were too German-centric”, his predecessor Silvio Berlusconi said Tuesday.

“All the economic statistics have worsened,” Berlusconi added in an interview with Canale 5, a television station he owns.

Berlusconi has said he will run in February’s election, while Monti, an unelected technocrat, has not yet announced his decision.

In Hong Kong meantime, premiums paid to above the spot price to buy gold rose to a five-month high Tuesday, dealers said.

“Chinese buying has been picking up,” says Dick Poon, Hong Kong general manager at precious metals refiner Heraeus.

“The banks want to keep some inventory and prepare for the holiday demand around the [Chinese] Lunar New Year [in February].”

Since refineries tend to close over Christmas and New year in the West “there probably won’t be much supply around until mid-January,” adds Ronald Leung at Lee Cheong Gold Dealers.

China’s new loans and M2 money supply were lower than most analysts expected last month, according to data published Tuesday.

“M2 has mirrored economic activity,” says Xianfang Ren, Beijing-based senior analyst at IHS Global Insight.

“We’ve felt all along that China wouldn’t have a strong recovery, that there would be a lot of volatility along the way.”

South Africa’s gold production in October was half what it was a year earlier after a series of strikes and protests by mineworkers, according to data from Statistics South Africa.

Turkey meantime  would have fallen into recession during the third quarter were it not for its gold exports, most of which go to Iran or the United Arab Emirates, according to Capital Economics chief emerging markets economist Neil Shearing.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben writes and presents BullionVault’s weekly gold market summary on YouTube and can be found on Google+

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

 

USD/CAD: Speculations on Fed Accommodation to Push Risk Demand

With no major economic reports expected today from North America, market participants speculate on the announcement from the Federal Reserve and the effect on the US dollar opposite the Canadian currency. Traders likewise continue to wait for hints from both Democrats and Republicans on the progress of the fiscal cliff negotiations.

A Bloomberg survey of economists states that the Federal Open Market Committee will announce a decision to amplify record accommodation tomorrow in monthly Treasury buying that will push its balance sheet almost to $4 Trillion. The monetary policy panel pledged in October to continue that plan until the labor market improves “substantially.”

The central bank is scheduled to end Operation Twist this month. The program swaps $45 Billion of short-term Treasuries each month for longer-term government debt, which has kept the total size of the balance sheet unchanged. Meanwhile, what economists are expecting from a probable new accommodation through new Treasury purchases would expand the balance sheet.

Roberto Perli, a Managing Director at International Strategy & Investment Group Inc. comments that by adding Treasury purchases, policy makers “would continue to lower mortgage rates and create conditions that would be favorable for a continued recovery in the housing market.”

Mortgage bond purchases by the Fed have helped revive the housing market by pushing down the rate on a 30-year, fixed-rate mortgage last month to a record 3.31 percent. Policy makers “do not want mortgage rates to climb much higher,” said John Lonski, Chief Economist for Moody’s Capital Markets Group in New York. “They will do their utmost to keep long-term borrowing costs on the low side.”

Treasury purchases would constitute “insurance that if there’s a failure to agree between Congress and the president, the Fed is out there to prevent an even bigger downdraft,” says John Silvia, Chief Economist at Wells Fargo & Co.

A sell bias is suggested for the USDCAD today, considering the likely demand for risk on speculations of the Fed’s actions tomorrow. Technical price corrections are still likely, though.

For more news, analysis, technical charts and candlestick analysis, visit AlgosysFx Forex Trading Solutions.

Italian Prime Minister’s Resignation Leads to Euro Losses

Source: ForexYard

The euro came within reach of a two-week low vs. the US dollar yesterday, amid news that the Italian Prime Minister plans on resigning. Investors, unsure of how the news would affect the euro-zone economic recovery, shifted their funds to safe-haven assets as a result. Today, in addition to any news regarding the political situation in Italy, both the German ZEW Economic Sentiment and US Trade Balance, scheduled to be released at 10:00 and 13:30 GMT, respectively, have the potential to generate market volatility.

Economic News

USD – US Trade Balance Set to Impact Dollar

The US dollar was bearish overall yesterday, amid the continued deadlock in “fiscal cliff” negotiations between US Congressional leaders and President Obama. If the negotiations fail to progress, a set of tax increases and budget cuts threaten to push the US back into recession. Against the safe-haven Japanese yen, the greenback fell some 40 pips during European trading, eventually trading as low as 82.11, before moving back up to the 82.20 level. The USD/CHF fell close to 30 pips during mid-day trading, eventually reaching the 0.9330 level.

Turning to today, the main piece of US news is likely to be the Trade Balance figure, set to be released at 13:30 GMT. Analysts are predicting the indicator to come in at -42.4B, which would represent a decrease over last month. A worse than expected indicator today could result in the dollar extending its bearish trend against both the JPY and CHF. Additionally, traders will want to pay attention to any announcements regarding the “fiscal cliff” negotiations, as they are likely to impact the dollar.

EUR – Euro-Zone Uncertainties Weigh Down on Euro

Following the announcement that the Italian Prime Minister would soon be resigning, investors spent most of the day yesterday trying to determine how the news would affect the euro-zone economic recovery. As a result, the euro fell within reach of a two-week low against both the USD and JPY, before seeing modest upward movement later in the day. After falling as low as 1.2894 during the overnight session, the EUR/USD was able to bounce back to 1.2930 during mid-day trading. Against the yen, the euro traded as low as 106.04 before moving back to the 106.34 level later in the day.

Today, the main piece of euro-zone news is likely to be the German ZEW Economic Sentiment figure, scheduled to be released at 10:00 GMT. Analysts are forecasting the indicator to come in at -11.4, slightly higher than last month’s result of -15.7. Better than expected news today, could calm investor fears that the ECB is considering an interest rate cut, which would lead to risk taking in the marketplace and bullish movement for the euro.

Gold – Gold Sees Modest Gains amid US Economic Uncertainties

The price of gold was able to advance close to $10 an ounce during European trading yesterday, as concerns regarding the impending US “fiscal cliff” boosted gold’s safe-haven status among investors. After trading as high as $1717.29 during mid-day trading, the precious metal dropped back to the $1713 level by the end of the European session.

Today, gold traders will want to pay attention to the ongoing budget negotiations between US Congressional leaders and President Obama. Any sign that a deal is closer to being reached may result in dollar gains, which could result in the price of gold falling as a result.

Crude Oil – Crude Oil Reverses Gains amid Risk Aversion

After seeing mild gains throughout the first part of the day yesterday, crude oil proceeded to turn bearish toward the end of European trading, as concerns regarding the EU and US economies drove investors to safe-haven assets. The price of oil peaked at $86.60, up close to $0.40 a barrel, before falling to the $86.05 level during afternoon trading.

Today, crude oil traders will want to pay attention to the US Trade Balance figure, set to be released at 13:30 GMT. Should the indicator come in above analyst expectations, it may be taken as a sign that US demand for oil will increase, which may cause the commodity to turn bullish during afternoon trading.

Technical News

EUR/USD

The Bollinger Bands on the weekly chart are beginning to narrow, indicating that this pair could see a price shift in the near future. Furthermore, the MACD/OsMA on the same chart is close to forming a bearish cross, signaling that the price shift could be downward. Going short may be a wise choice for this pair.

GBP/USD

Most long-term technical indicators show that this pair is range trading at the moment, making a definitive trend difficult to predict. Traders may want to take a wait and see approach, as a clearer picture is likely to present itself in the near future.

USD/JPY

The weekly chart’s Slow Stochastic has formed a bearish cross, signaling an impending downward correction. Furthermore, the same chart’s Williams Percent Range has crossed over into overbought territory. Opening short positions may be the wise choice for this pair.

USD/CHF

While the Williams Percent Range on the daily chart has crossed over into overbought territory, most other long-term technical indicators show this pair range trading at this time. Taking a wait and see approach may be the preferred strategy at this time, as a clearer picture is likely to present itself in the near future.

The Wild Card

USD/ZAR

The daily chart’s Slow Stochastic has formed a bullish cross, indicating that an upward correction could take place in the near future. Furthermore, the Williams Percent Range has fallen into the oversold zone. This may be a good time for forex traders to open long positions ahead of possible upward movement.

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

 

Aussie Drops as Chinese Data Disappoints

By TraderVox.com

Tradervox.com (Dublin) – The Australian dollar dropped from its two-month high as Chinese export data showed worse performance than the economists had projected. The country’s exports and imports were lower than expected advancing speculation of dwindling global economy and damping the demand for Australian dollar. The Aussie also pared last week’s gains after home-loans approvals increased less than economists had predicted. New Zealand’s dollar’s demand was supported by data from manufacturing sector that indicated the nation’s manufacturing volumes increased. The two south pacific currencies jumped to their highest level in three weeks versus the euro after Silvio Berlusconi, the Italian Prime Minister swore to defeat the incumbent leader Mario Monti.

According to Lee Wai Tuck, a Singapore-based currency strategist at Forecast Pte, the Chinese data was a disappointment to the market despite the strong data that had been coming from the country in the recent past. Lee added that yesterday’s data from China has cast a shadow on the economic recovery process. He questioned whether the rebound in economy that has been experience in the last few reports can be sustained and whether Chinese demand for Australian goods will continue. The Australian sovereign bonds dropped as benchmark ten-year yield rose by 0.03 percentage point to 3.15 percent.

Data from China indicated that the country’s exports increased by 2.9 percent in November from a year earlier while the imports remained unchanged and trade surplus was at $19.6 billion. According to the report released by customs administration in Beijing yesterday, the growth in the overseas shipments compares with the 9 percent projected by economists. The Australian dollar dropped by 0.1 percent at the close of day on Friday 8, after increasing by 0.6 percent in the week. The Australian dollar was trading at $1.0476. The currency rose to 81.48 euro cents, which is the strongest since November 20. The New Zealand dollar advanced by 0.1 percent to trade at 83.29 US cents and fetched 68.63 from last week’s 68.68.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
Tradervox.com is a Forex News Portal that provides real-time news and analysis relating to the Currency Markets.
News and analysis are produced throughout the day by our in-house staff.
Follow us on twitter: www.twitter.com/tradervox

Market Trends 11.12.12

Source: ForexYard

printprofile

Hey Everyone,

Below are some market trends for today.

Good luck!

-Dan

Gold- May see upward movement today
Support- 1702.04
Resistance- 1724.54

Silver- May see upward movement today
Support- 32.59
Resistance- 33.68

Crude Oil- May see downward movement today
Support- 84.47
Resistance-87.00

Dax 30- May see downward movement today
Support- 7465.18
Resistance- 7547.00

EUR/USD May see downward movement today
Support- 1.2859
Resistance- 1.3038

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Market Review 11.12.2012

Source: ForexYard

printprofile

Speculations that the US Federal Reserve will expand its monetary easing program after they finish meeting later this week resulted in slight dollar losses during the overnight session. At the same time, worse than expected Chinese news led to risk aversion in the marketplace which limited the dollar’s losses.

Concerns regarding the euro-zone economic recovery, combined with the Chinese news, led to moderate losses in gold and silver prices last night. Meanwhile, crude oil gained some $0.30 a barrel during early morning trading.

Main News for Today

German ZEW Economic Sentiment- 10:00 GMT
• Forecasted to come in at -11.4, which if true, would be the seventh month straight of negative economic sentiment in the EU’s biggest economy
• Worse than expected news could result in euro losses during mid-day trading

US Trade Balance- 13:30 GMT
• Forecasted to come in at -42.7B, below last month’s -41.5B
• Worse than expected news could result in dollar losses during afternoon trading

Read more forex news on our forex blog

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Why Silver Could Be the Best Investment in 2013

By MoneyMorning.com.au

The Best Investment of 2012 to Repeat in 2013?

Toward the end of last year, the editors here at Port Phillip Publishing got up on stage at our Doomers’ Ball, to give our ‘Big prediction for 2012′.

To paint the picture, at the end of 2011 the market had been well and truly beaten up.

The Metals and Mining index (XMM), Small Ords (XSO) and Emerging Companies indices (XEC) all fell more than 22% over the year. So it was a bit challenging to find a sunny patch in the market to get excited about for a ‘big call for 2012′.

Admittedly, when I made my call, there was a fair bit of heckling!

I even caught a few folks checking their eyelids for holes, and catching the odd fly for good measure.

But thankfully, twelve months on – so far – my big call has turned out to be the best performer of 2012

What was the call?

It was SILVER.


So far this year silver has gained 18.4%.

For comparison gold has gained 8.8%.

The Metals and Mining index (XMM), Small Ords (XSO) and Emerging Companies indices (XEC) are all down again.

The S&P500 is up 12%, and the ASX200 has surprised with a gain of 11%.

The only thing supporting our market is the financial sector: the ASX200 Financials index (XJF) is up 18%. So the Australian banks were one of the few sunny spots.

But humble silver still beat them, and with a lot less effort involved too.

Just the Start for Silver

The downside with silver is that it comes with plenty of volatility. All the silver bullion globally is worth just $60 billion – just half the size of BHP Billiton’s (ASX:BHP) market cap. So the silver price can be prone to some big swings.

The upshot of this is that, if you get the timing right, you can trade it for accelerated profit. Back at the end of July, I wrote to you to say:

‘Watch silver. It looks interesting […] it looks increasingly as though the worst may be over…

‘While gold has gained an average of 17% a year in $US terms, silver has outshone it, gaining an average of 22% each year. The trick to profiting from this has been buying silver on the dips to get these gains – and just maybe we are staring at one of those dips right now.’

In the four months since I wrote to you about this, silver has gained 18.4%. This is equal to its overall gain over the whole year.

Silver – a gain of 18.4% makes it the best performing asset of 2012

Source: Stockcharts, MM edits

The good news is that it looks like silver’s move has only just started in earnest.

The effects of the latest round of quantitative easing (QE) have only just started flowing through into the silver price.

During the first round of QE, silver gained 74%; and during QE2 (starting from the Fed pre-empting the program) silver gained 94%. These are huge moves for any commodity.

So with the Fed now ‘printing’ $40 billion a month indefinitely, silver is well poised to maintain its new rally.

It’s critical to note that silver was the best performing asset class during Obama’s first presidential term.

The humble metal more than tripled<, gaining 208% over the four-year period.

The only other asset to put in a triple-digit percentage gain was gold, with 122%.

This incredible performance is probably why the US mint has just had its busiest month on record. The prospect of another four years like the last four, with money printing, debt and fiscal deficits, is very bullish for precious metals.

Silver’s technical chart looks excellent as well.

Silver is a Great Investment Opportunity

When the technical price action backs up the fundamental picture – it can often translate into a great investment opportunity. In other words, if the idea is good, and the timing also looks right, then the shot could be a winning one.

To get here, the market has been through some pain in the last 18 months. The second half of 2011 was horrendously volatile for silver. It set a record high on Anzac Day, only to fall more than 30% within weeks straight after. Then in September, silver got smashed down by 30% AGAIN.

Most of this year has been spent regaining its footing after last year’s abuse. It has taken time, and many speculators have left the market, understandably fed up with the volatility.

But this mass clear-out has set the stage for the next leg up. The technical chart confirms this and has turned bullish again. In late September, silver traced a golden cross. This technical signal has been a solid predictor of the start of a new up-trend.

Even better, since then the 200-day moving average held fast during its test. Now silver has broken up above the 50-day moving average – and stayed there. This paints a bullish technical picture of a price in strong uptrend.

All the stars seem to be aligned for silver now.

We didn’t have a ‘Doomer’s Ball’ in 2012, as we hosted a big conference in Sydney earlier in the year.

But if we had to go on stage today and make a big call for 2013, I’d have found it very hard to look past silver – again!

Dr Alex Cowie
Editor, Diggers & Drillers

From the Port Phillip Publishing Library

Special Report: The Fuse is Lit

Daily Reckoning:
The Australian Banking Behemoth

Money Morning:
The Long, Drawn Out Retreat in Australian House Prices

Pursuit of Happiness:
Will New UN Deal Force the Government to Deny Climate Change?

Diggers and Drillers:
How You Can Use a Bottomed-Out Silver Price to Quadruple Your Returns


Why Silver Could Be the Best Investment in 2013

Why Fund Managers Are Not Your Friends

By MoneyMorning.com.au

According to efficient market theory, people are only interested in one thing – making money.

They will only buy an asset if they think there’s a decent chance of making a good future return. They’ll only sell when this stops being the case.

Because investors are ‘rational’, they won’t buy overvalued stuff. And they won’t sell undervalued stuff. So prices will almost always be about right.

This is utter nonsense, of course. But not for the reasons you might think. People aren’t always rational, but they generally try to invest to make a profit.

The real reason that markets get things so badly wrong is because the people investing on your behalf, don’t always care about your profits. And that’s yet another good reason to take charge of your own finances rather than handing the job to a fund manager.

Let me explain…

People are Rational – but Markets Aren’t

Efficient market theory has never made much sense.

Recent history proves that. Two catastrophic stock market crashes inside 10 years. A devastating global property bubble. Today’s burgeoning bond bubble. None of this is evidence of an efficient market.

And it’s hard to believe that anyone beyond the most isolated ivory towers in academia takes it seriously these days.

The reason the theory has survived so long is because it provides a convenient, clever-sounding rationale to excuse the self-serving behaviour of everyone involved in investment markets.

Central bankers, for example, argued that if markets were efficient, then bubbles couldn’t exist (because prices would always be correct). So who were they to puncture them?

They ignored the fact that the very existence of a central bank, which sets the most important price of all (the price of money), destroys the idea of an efficient market.

Especially if the central bank only ever acts to prop up falling asset prices.

But it’s not just central bankers who are the problem. It’s the people we pay to manage our money for us. The FT’s John Plender has written an interesting piece on a new paper by Paul Woolley and Dimitri Vayanos of the London School of Economics.

The problem, say Woolley and Vayanos, is ‘information asymmetry’. What this boils down to is that when you give your money to an intermediary to invest on your behalf, the incentives change.

These intermediaries ‘act rationally in the pursuit of profit – but not necessarily the profit of the ultimate beneficiaries [the actual investors]‘.

The Strategy You Can Use:
Steer Clear of the Fund Management Herd

Fund managers make money by increasing their assets under management. The more money they manage, the more money they make. Being able to demonstrate a decent track record is only one small aspect of attracting new money.

More importantly, to avoid losing clients, you don’t have to be the best fund manager. You just have to avoid being the worst.

So there’s a huge incentive to stick ‘close to the fund management herd’, as Plender puts it. It doesn’t matter if you lose money for a client, as long as everyone else is losing at least as much.

Throw all this into the mix, and it’s no wonder that markets are anything but efficient. You have an entire group of intermediaries who control the majority of the money in the market, investing on the basis of what all the others are doing.

Notes Plender: ‘it seems probably a majority of equity investment is carried out without regard to the value of the equities being traded.’

In other words, the ‘irrational’ behaviour in markets is nothing to do with people as a whole being irrational. The real problem is that we hand the job to a financial industry which is more interested in its own profits, than in our returns.

This is why it’s worth taking charge of your own money. Because not only do you get to cut out the middlemen. You can also take advantage of their herding behaviour, by buying the assets that they are neglecting, and avoiding the ones that they are piling into.

John Stepek
Contributing Editor, Money Morning

Publisher’s Note: This is an edited version of an article that originally appeared in MoneyWeek

From the Archives…

How You Can Use Small-Cap Stocks to Leverage Your Share Returns
7-12-2012 – Kris Sayce

How to Make Cash-Like Returns Using Shares
6-12-2012 – Kris Sayce

How Long Can the Market Ignore These ‘Warning Signs’?
5-12-2012 – Murray Dawes

Is There Any Good News to Come from the US Debt Crisis?
4-12-2012 – Dr. Alex Cowie

Buy Small Caps Now While Investors Are Crying
3-12-2012 – Dr. Alex Cowie


Why Fund Managers Are Not Your Friends

The Elections Paper: Socionomics and Politics Achieve Peer Review

The Elections Paper: Socionomics and Politics Achieve Peer Review

By Robert Folsom |  2012

The Socionomics Institute is pleased to announce that on Nov. 2, 2012, its latest research, “Social Mood, Stock Market Performance and US Presidential Elections,” published in Sage Open, a peer-reviewed journal of the social and behavioral sciences.

We congratulate the paper’s authors, Robert Prechter and Deepak Goel of the Socionomics Institute, Wayne Parker of Emory University and Matthew Lampert of Cambridge University and the Socionomics Institute, for this important advancement in the study of social mood’s influence on politics.

The “Elections” paper shows a significant positive relationship between net changes in stock prices prior to Election Day and incumbents’ chances for re-election. The authors contend that the stock market does not reliably affect elections, and election outcomes do not reliably affect the stock market. Rather, they say, social mood regulates both.

The paper is available for free download from the Social Science Research Network – a vital resource for scholars, researchers and the educated public that currently boasts over 350,000 papers. “Social Mood, Stock Market Performance and US Presidential Elections” is SSRN’s 4th most download paper of the past 12 months and among its top 100 all-time. Download the paper from SSRN here.

If you would like to receive the best of Social Mood Watch and other free socionomics content each week, sign up here.