03-23-2020: What Money Won't Buy...

Can a LOT of money buy a vibrant economy? With the trillions of dollars that the Fed and US government are throwing into the economy, we will soon find out. I do not think all of this stimulus money, that is working its way through Congress, will do anything more than keep families and companies (large and small) on life support until the coronavirus is under control.

Since the economy is at a virtual full-stop until the coronavirus is under control, throwing the trillions of dollars into anything and everything that moves, will do nothing but keep people and companies from running out of life-sustaining income just to keep the lights on and food in the pantry.

I am sure the objective is to keep the economy from total collapse until there is time for the economy to get back on its feet. But, from a market perspective, the trend of the data support a different outcome (so far). The trend of the market is down and a multi-trillion dollar stimulus which is focused on survival (which it has to do), will not stop the bad data regarding the economy from growing; perhaps as exponentially.

While I do expect the market to boom higher (briefly) when the stimulus package is approved, I believe it is more of a selling opportunity than a buying one. I plan to sell into the next big rally by buying inverse ETFs. I still want to stay mostly in cash in most of my client portfolios, and I am absolutely NOT interested in buying any stocks. Stock ownership right now is very high risk since the market 'could' move much lower.

For those of you still holding on to your stock and/or mutual fund portfolios, I empathize with your plight. Unfortunately, I am afraid you have more (perhaps a lot more) pain in your future.

My client portfolios are growing in this market and that is the plan. We want our clients to hold onto their gains and grow their portfolios in a bear-trending market through judicious use of inverse ETFs.

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