by Don DiPaola, Investment Research Dynamics:
There is a feeling shared by many investors that something is not quite right in the financial world today. They do not know or understand exactly what is going on but the recovery that is supposed to be happening is not showing any visible signs of that being the case. Their neighbors are losing their jobs. Food costs and daily living expenses are going up even though there is supposed to be no inflation. The world is becoming a dangerous place. Countries are going into default. States and counties are under financial duress, pensions are underfunded.
In spite of all of the above, the stock market continues to make new highs and has not had a significant correction since it turned up in March of 2009. That is not natural in normal markets. Governments around the world keep printing an inordinate amount of money on a monthly basis yet there have been no positive economic effects produced from this activity. Closer examination of the economic numbers published by the government, especially those in the monthly jobs report and housing data, cause many to be extremely suspicious if not outright agnostic. Something isn’t right in the financial world and we totally agree. However, I do not want to get into a discussion as to what and why we are where we are today. Make no mistake about it, the world is facing a financial crises the likes of which have never been seen before. This has been discussed ad nauseum and is not the purpose here.
What is pertinent is now is the time to put your investment portfolio insurance in place. NOW!
Everyone should have a minimum of 10-25% of their investment portfolio insured. Insured against what? Insured against a falling bubble bursting stock market, geopolitical uncertainty, unrestrained government printing of currency, and a global collapse of the financial system with the traditional “bank holidays as seen recently in Greece”. Greece is already gone and Puerto Rico will be defaulting on bonds this week. Several other countries in the EU are soon to follow Greece. Chicago and the state of Illinois are in deep financial trouble as are many other states and counties.
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