For Wednesday January 23, 2013, We Recommend Investing in US Markets

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Technical Comment:

The S&P 500 advanced 0.44% on Tuesday with volume above last Friday’s volume and above the 30 day moving average.  Tuesday was thus another strong-volume up-day.  This continues the on-going technical pattern that is consistent with market growth.  If the S&P 500 declines about 15 points on Wednesday (-1.1%) our automated forecast could change to an uncertain trend based on the settings of our stop-loss algorithm.

Subjective Comment:

Continue to add to your investments in US equity markets, and use leverage to accelerate the growth of your returns.  Very experienced investors can use margin brokerage accounts for leverage.  If you want to just buy an index fund, we recommend leveraged index funds that grow with US markets.  Hold on to your price inflation hedges because the booming US economy and stock market will come with higher price inflation.  All of this is being driven by the aggressive growth rate of the US money supply.  Price inflation will in turn cause bond prices to fall as bond investors demand higher yield to compensate for the loss of purchasing power accompanied with the US Dollar inflation.  For this reason, avoid all bonds.  It is up to you to determine the best investment mix for your portfolio.  Our recommendation is to minimize cash, avoid all bonds, have some price-inflation hedges and use leveraged index funds for aggressive growth.  US markets are booming and will continue to do so for the foreseeable future, but how long this will last is unknown.  Keep track of the US M2 money supply growth rate and learn about Austrian Business Cycle Theory to understand cause and effect.  Please keep tabs on our daily posts here and let your friends and family know about us.

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