The action in the stock market can be similar to that of what takes place in relationships, mainly mixed signals and confusion (strange analogy I know but a good one if you think about it). Case in point, today FedEx came out and said that they see global economic weakness as shipping orders and retail orders have dropped off substantially. On the other side of the coin, homebuiler sentiment released this morning showed the most positive sentiment in over 6 years...so here's the conundrum:
A. FedEx says global economic growth (including the U.S.) is slowing
B. U.S. homebuilder sentiment is extremely positive (and the housing market is a driver of economic growth)
Manufacturing data out of the U.S. remains somewhat positive whereas manufacturing data out of Europe and China continues to look ugly. So, how do we go about investing in this mixed climate for economic and investment growth? Wait till U.S. stocks sell off then look to buy back in to them. As I've been doing of late, I would be taking profits on any investments you have and move that money back out of the markets and wait patiently for a better opportunity to be invested. While I don't really like the current market set up, I still think it's a good idea to continue to own high paying quality dividend paying companies such as Bristol-Myers Squibb (BMY), Chimera Investment Corp (CIM), and KKR Financial (KFN).
In other important market news, Mitt Romney's Presidential campaign looks to be struggling and as I've noted investors see Romney as pro Wall Street and this could bode negatively over the fall as we move further towards the election (mind you this is not a political view just stating the facts on what Wall Street investors perceive).
I know stocks have performed well over the past month but I would caution investors NOT to chase performance and aggressively buy stocks at this point, the risk/reward is not favorable at this time.
