{"id":35063,"date":"2013-01-04T12:24:45","date_gmt":"2013-01-04T17:24:45","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=35063"},"modified":"2013-01-04T12:24:46","modified_gmt":"2013-01-04T17:24:46","slug":"will-history-repeat-itself-in-2013","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/01\/04\/will-history-repeat-itself-in-2013\/","title":{"rendered":"Will History Repeat Itself in 2013?"},"content":{"rendered":"

By The Sizemore Letter<\/u><\/a> <\/p>\n

Global equity markets finished 2012 with a bang, and the S&P 500 ending the year up 13.4%.\u00a0 But what you might have forgotten is that virtually all of those gains came in the first quarter<\/i><\/b>.\u00a0 The S&P 500 rose 12.0% in the first three months of last year and only managed to squeak out another 1.4% in the nine months that followed.<\/p>\n

Why do I bring this up?\u00a0 Simple.\u00a0 I don\u2019t want you to see the 2013 monster opening-day rally and draw the wrong conclusions.<\/p>\n

I say this as a market bull.\u00a0 Overall, I do expect 2013 to be another profitable year.\u00a0 But I also expect it to be another year marked by political drama\u2014both in Washington and in the Eurozone\u2014and the market volatility that comes with it.<\/p>\n

Remember, this Fiscal Cliff deal solved nothing<\/i>.\u00a0 It merely postponed a bigger debate about the debt ceiling by two months.\u00a0 And both of these are minor compared to the real fiscal crisis coming, which is the retirement of the Baby Boomers and the stresses this will put on Social Security and Medicare.<\/p>\n

On the other side of the Atlantic, the threat of a Eurozone collapse has receded, at least for now.\u00a0 But Europe\u2019s stabilization has rested largely on two Italian men named Mario\u2014ECB president Mario Draghi and soon-to-be ex-prime minister Mario Monti.<\/p>\n

I\u2019m not too worried about Mr. Draghi; after dithering for months, he has finally managed to instill some confidence in the euro.\u00a0 But frankly, I\u2019m terrified of what might come after Mr. Monti leaves office.\u00a0 Monti was the first adult to lead Italy since World War II, and he has almost singlehandedly calmed the bond markets into financing Italy\u2019s gargantuan debts at a reasonable rate.\u00a0 But what happens when he leaves\u2026and the infantile political theatrics start up again?<\/p>\n

I guess we\u2019ll have to see.<\/p>\n

In recent weeks, I\u2019ve recommended that investors buy income-producing master limited partnerships<\/a> and dividend-paying (and raising) stocks<\/a>.\u00a0 Today, I\u2019d like to tell you how to incorporate these into a larger trading strategy for 2013.<\/p>\n

In a choppy, sideways market, there are two ways to make money.\u00a0 You can actively trade, buying low and selling high, or you can get paid via a consistent dividend stream.\u00a0 I recommend a combination of the two.<\/p>\n

In a moderately aggressive portfolio, put roughly 60% into \u201ccore\u201d holdings that you are content to hold on to through any volatile rough patches. This is where I would place $<\/span>VIG<\/a> and $<\/span>AMJ<\/a>, the two ETFs I recommended in late 2012.\u00a0 It would also be a good place for REITs and other income-oriented plays.<\/p>\n

With the remaining 40% of your portfolio, trade to your heart\u2019s content.\u00a0 Go long, go to cash, or even go short.\u00a0 This is where I would place more speculative bets, such as emerging markets or stocks that you are trading as momentum plays.<\/p>\n

Have a safe and prosperous 2013, and stay tactical!<\/p>\n

This article first appeared on TraderPlanet<\/a>.<\/p>\n

SUBSCRIBE <\/a><\/strong>to Sizemore Insights<\/em>\u00a0via e-mail today.<\/p>\n

The post Will History Repeat Itself in 2013?<\/a> appeared first on Sizemore Insights<\/a>.<\/p>\n

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