THIS IS GETTING OLD

LONG TERM TREND: As most of you probably know by now, once again the market closed down from the previous week. Take a glance at the attached chart and you'll see once again that the market failed at the 40 week moving average. This is not a healthy sign for the stock market.



SUGGESTION FOR 401-K: Big surprise! I'm on the sidelines. I suspect the rest of you are about as tired as I am of not having my 401-K money work for me. This is my opportunity to rail on 401-K plans. The main problem is the fact that you are limited to investing solely in mutual funds. The problem with this is that in a sideways to down market the vast majority of mutual funds will perform similarly to the broad market. The fact of the matter is that on a long term basis the markets have become very unpredictable. So unless the market is trending up the ONLY benefits of investing in a 401-K are the tax benefits. In my own situation, I stopped years ago contributing any additional funds to my 401-K. The reason is that IRA plans allow a lot more flexibility in investment choices, including employing the use of options. Bottom line is that the above market returns you can earn with this type of flexibility outweigh any tax benefits. I plan on telling you more about what I'm doing in this area after the new year.

Be Blessed and prosper!