When Federal Reserve policymakers announced the half-a-point cut in interest rates last Tuesday, I was almost at a loss for words.

As all of you know, I had projected reduction of 25 basis points, and by the time Tuesday’s meeting of the central bank’s Federal Open Market Committee (FOMC) rolled around, the market supported my view. Going into that FOMC meeting, the outlook was decidedly negative: The U.S. economy was slowing, and the lousy housing market was leading the downturn, and the global fixed-income markets are undergoing a painful restructuring. So far, everything was playing out according to our expectations.

But then the Fed surprised us with a mammoth injection of “monetary steroids.”

The central bank, seeking the Fed Holy Grail – a ‘soft landing’ – for the economy 9except for the housing sector), watched in recent months as the subprime-mortgage-induced housing problems spilled over into the fixed-income markets. Suddenly, what had started out as a domestic housing slump had turned into a global credit contagion.

While the ‘science’ of central banking includes many degrees of ‘art,’ the Fed found /itself in the difficult position of having to choose between two strategies, neither of the optimal. It could:

• It could cut interest rates – on the basis of one bad employment report and the possible widening of a global credit crunch – in anticipation of a possible economic slowdown.
• It could ‘stand pat’ and hold the line on interest rates – in the face of renewed inflationary expectations – as evidenced in the higher prices of gold, oil, wheat, and other commodities, as well as the low value of the U.S. dollar. But with the markets already having factored in a rate cut, the “stand pat” option was really no option at all. The reason: The moment the Fed said it was holding the line on short-term rates, the stock market would literally fall out of bed.

That meant that the central bank’s choice was a Hobson’s choice – for it was really no choice at all.

So the Fed opted to “protect” economic growth – and, in the process, mitigate the downturn in housing and the problems facing such highly leveraged players as financial institutions or hedge funds by dropping interest rates. It caught the entire market by surprise. This was much more than the market and I expected, and generated a rush out of cash and bonds. Why?

Very simple: A fear of re-acceleration in inflation. With a weak U.S. dollar and very strong global growth, the cuts add more fuel to the fire. And this will have a very beneficial effect on U.S. growth six to nine months down the line. While core inflation has recently been in a downward trend, the rise in the U.S. dollar-denominated commodities (oil, gold, other minerals and agricultural commodities) – together with the low value of the U.S. dollar – poses a major inflationary risk.

So, what’s your best defense in this situation?

• Go on the offense by taking advantage of the expected continued increase in commodities prices by purchasing commodities producers, such as major global mining companies.
• Buy into the more-promising emerging markets – such as Brazil – since they will be big exporters of these commodities. Also, many of these markets will benefit from major consumer booms as the economies evolve and develop.

The Fed acted boldly, and the markets responded likewise. We remain opportunistically bullish, with a preference for international and U.S. companies that will benefit from international growth.

Stay tuned for more action, probably as soon as next week.

All things considered, U.S. central bank chief Ben S. Bernanke and the Federal Reserve have so far demonstrated a tremendous amount of restraint amid the credit crunch.

Market volatility, tightening credit conditions, and the collapse of the subprime-mortgage-stuffed Bear Stearns Cos. (NYSE: BSC) hedge funds – as well as several mortgage lenders operating at the highest end of the risk spectrum – have left many investors nervous. Still, the Fed’s hand remains steady.

On Aug. 7, when Fed policymakers last met, the central bank stood at the precipice of the most disturbing market trouble this year. At the time, it was obvious that a market downturn was looming, and that the subprime mortgage crisis was puffing smoke like a long-dormant volcano that was ready to blow. Curious observers began to speculate that the Fed would take action, cut rates, and preempt what could only become an uglier situation.

But the Fed did nothing.

It acknowledged that the U.S. stock market was volatile, that the U.S. housing market was in peril, and that lending conditions were less than ideal. But it was just as clear that inflation remained the central bank’s main concern. When the two Bear Stearns funds collapsed, and one of the largest banks in Europe –BNP Paribas SA (EPA: BNP) – was forced to freeze a couple of money-market funds that were also loaded with asset-backed commercial paper containing subprime exposure, it was the European Central Bank that took action first.

The ECB was forced to inject a record $130.6 billion in added temporary liquidity into the banking system. The Fed injected another $24 billion dollars.  By the end of the week the ECB had issued $214.2 billion, while the Fed had supplied $59 billion to its banks. Last week, Fed Chairman Bernanke announced the reduction of the bank’s discount rate, but held its benchmark Federal Funds rate steady at 5.25%. The Fed Funds target rate is what Fed system banks charge one another for overnight loans.

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With their coordinated approach, the ECB and the Fed seemed to add enough liquidity to keep their respective banking systems operating at a reasonably normal level – without having to cut their target rates. In the Fed’s case, that action would run the risk of placing too much liquidity into the financial system. That, in turn, could over-stimulate the U.S. economy, and its banking system – and which would also let the subprime speculators off the hook, since many would be able to refinance, and avoid bankruptcy.

If you think back to 1998, the crisis of the day was the implosion of the Long-Term Capital Management hedge fund. After Russia defaulted on its domestic GKOs, an overleveraged LTCM, and a number of other speculators were forced to purge large portions of their assets. The result was a mad dash to the exits. 

The Fed made its move, cutting interest rates twice successively and fixing the problem in that one swoop. Sure enough, however, the law of unintended consequences came into play. The U.S. economy grew at an 8% clip in the last quarter of 2000, driving runaway investments in overvalued tech stocks, and also fueling a corporate and consumer credit binge that led to the 2002-2003 downturn.

The Fed may have learned its lesson. Now it seems reluctant to overreact and potentially create another bubble – and won’t easily opt to “bail out” reckless speculators, blind-to-risk borrowers, and super-aggressive lenders. Instead, the Fed has taken adequate measures to ensure market liquidity, and it has attempted to redress the negative impacts of a global credit crunch.

In short, it is not the central bank’s job to rescue banks or bail out investors who made ill-advised choices. Instead, it’s chief mandate is to, first, battle inflation wherever and whenever it appears; and, second, to remain vigilant against major drop-offs in economic growth.

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The credit crisis may get worse before it gets better in the coming months, as more than 2 million adjustable rate mortgages (ARMs) are ready to “re-set” – industry parlance for boosting their rates.
Credit worries pummeled stocks worldwide again yesterday. The Dow Jones Industrial Average dropped 207.61 points, or 1.6%, to close at 13,028.92 – just above the “psychologically important” barrier of 13,000, which was first traversed back in April. The Standard & Poor’s 500 Index fell 26 points (1.8%), and the Nasdaq Composite lost 43 points (1.7%). The FTSE 100 index dropped 1.1% and the Dow Jones Stoxx 600 index fell 1.2%, its third drop in four sessions.

Credit fears drove the declines, although lackluster reports from several retailers, including Wal-Mart Stores Inc. (NYSE: WMT) and Home Depot Inc. (NYSE: HD) put a chill in investors’ confidence about consumers.

In a move some economists fear will cause defaults to soar and the U.S. economy to stumble, borrowers who took out these ARMs in 2004 and 2005 – with low introductory “teaser” rates – will now see those rates climb by 35% or more. [For a Money Morning analysis of the credit market problems, click here.]

Two years ago as the housing market boomed, the number of sub-prime ARMs being underwritten was peaking just as lending standards were bottoming out. That means many lenders approved borrowers with questionable credit and little or no proof of income or assets. These buyers may have struggled just to make the low teaser rate payments and will now be saddled with higher adjusted rates.  It’s likely this will cause another large spike in delinquencies.

Also the Securities and Exchange Commission is looking into whether or not many Wall Street firms have been hiding losses from the sub-prime meltdown. According to the Wall Street Journal, regulators will be investigating brokerage firms for any signs of impropriety concerning their mounting losses.

Global investors should take heed: Japan’s economy continues to be much stronger than it looks.

When the world’s No. 2 economy reported its second-quarter performance on Monday, the figures were largely viewed as a disappointment; they showed economic growth of only 0.1%, or 0.5% on an annualized basis. That’s down from a revised growth rate of 3.2% for the first quarter, and was well below the median estimate of 0.9%, according to a survey of 27 economists surveyed by Bloomberg News.

With growth having slowed even more dramatically than economists expected, investors are fretting that it’s now much less likely that Japan’s central bankers will boost interest rates when they meet for two days next week.

Unfortunately, those fretting investors are focusing on the wrong elements of Japan’s prospects.

The Case for Japan

There are many sound strategies for investing internationally. One, which we advocate wholeheartedly here at Money Morning, is to “follow the money” – that is, ferret out the investment flows that point to the best profit opportunities. Another is to track what other noted global investors are doing, and following in their footsteps.

But one of the best is to pick out a country with terrific prospects, and then look for the best investments that nation has to offer. This so-called “top-down” approach to investing can be quite effective.

Especially when the country in question is as solid and promising as Japan.

In breaking down the second-quarter growth figures, we see that Japan’s consumption growth slowed from a 3.2% rate in the first quarter to a 1.6% rate in the second. Private-sector investment, on the other hand, was strong; it grew at a 4.8% annualized pace, up from 1.2% in the first quarter. (Don’t forget that Japan – unlike the United States – has no population growth, so a 2% growth rate in Japan is reflective of real growth; whereas in the U.S. market, a 2% economic growth rate represents true growth of only 1% – net of the 1% annual growth in the American population.)

Thus, in many respects, Japan’s economic position is the reverse of the U.S. economic position of 2005. Whereas U.S. consumption in 2005 was strong, it’s actually fairly weak in Japan, growing no faster than the overall economy. Conversely, whereas the U.S. economy of 2005 had to struggle against weak investment totals, investment in Japan today is quite strong, as this key Asian nation re-equips itself after 15 years of recession.

Housing, too, was a strong contributor to the U.S. economy’s overall vitality in 2005. But in Japan, it is very weak today, with private residential investment down in the second quarter at an annual rate of 12%.

In terms of government spending – always an interesting area to analyze – the United States of 2005 and Japan of today are uncannily once again mirror images of one another. Whereas public spending was increasing rapidly in the United States in 2005, it is flat in Japan, where public investment actually plunged by an 8.4% annual rate in the second quarter. This accounts for much of the decline in GDP growth, and reflects the tight fiscal policy in the Japanese budget propounded by Prime Minister Shinzo Abe at the beginning of the year.

Public-spending restraint is never popular, but in Japan’s case it is vital to rebuild public finances, and to allow the private economy to increase at a healthy rate. One of Japan’s major problems in the 1990s was that the rapidly expanding public sector was growing faster than the economy, leaving little or no room for private-sector expansion. This position is now reversing, as the public sector shrinks its share of the economy and the private sector correspondingly expands. Japan still has public debt of about 160% of GDP, but most of that is held in various domestic savings funds.

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Some Top Plays on Japan

So it depends what you like. If you like a country where people spend more than they earn, government expands more rapidly than the economy, house prices and investment roar ahead and business investment is sluggish because of massive overbuilding in a bubble a few years earlier, you’ll prefer the 2005 version of the United States.

If, on the other hand, you prefer a country where people save, private consumption is restrained, housing is subdued, the government is keeping a tight rein on wasteful spending, and business investment is booming after a 15-year recession, you’ll prefer Japan. It’s all a question of investor tastes.

I know which way my tastes run. For those who agree with me – and who like to carefully manage their risk – I would suggest the streetTracks SmallCap Japan ETF (AMEX: JSC). As this illustrates, on the whole I prefer smaller companies, which can benefit from continued growth in the Japanese economy without being buffeted by international problems. But there are some very interesting larger plays, too.

Of the larger companies, Toyota Motor Corp. (NYSE-TM) warrants a close look, if only because it’s trading at a very modest 13 times earnings – and because it’s steadily eating the global lunch of U.S. stalwarts General Motors Corp. (NYSE: GM) and Ford Motor Co. (NYSE: F). It’s also worth taking a very close look at Canon Inc. (NYSE: CAJ); while it’s true that this stock is trading at 30 times earnings, which is expensive, remember that Japanese shares historically trade at rather steep valuations.

For the truly adventurous, consider a look at Omron Corp., the world’s leader in fuzzy logic control systems, a business we don’t really have in the West. Alas, in the U.S. market, Omron is quoted only on the pink sheets (OTC: OMRNY). But it does trade actively in both Frankfurt and Tokyo (TYO: 6645).

[Once again we’ve come across a solid overseas stock that U.S. investors can’t easily access. Money Morning newcomers would do well to spend a few minutes checking out two recent research reports: “Global Investing: Has Wall Street Rigged the Game?” and “International Investing: Why U.S. Investors are ‘Boxed Out’ of Big Global Profits.” Both reports are available for downloading directly from the Money Morning web site. And, naturally, both are free of charge.]

Japan: A Play on China

Lastly, whenever you discuss the investment allure of Japan, there’s also the question of China. As we know, China has a bright long-term future. But share prices have been on a torrid run for an awfully long stretch, which I believe substantially elevates risk. Japan is a solid investment in its own right, for all the reasons we’ve articulated [If you’d like additional reasons, you absolutely must check out our 6,000-word investment research report: “Global Investing: The Three Best Investments in Asia Today.” It, too, is available at no cost to subscribers to our free Money Morning global investing news service.] But, for the risk-averse, Japan is a solid indirect play on China (as are the other two markets we detail in our Asia research report). Many of Japan’s major manufacturing companies have established operations in Mainland China, which offers such benefits as lower wages and a close proximity to the headquarters operations of the big firms.

Martin O. Hutchinson is the Chief Global Investing Strategist for Money Morning, as well as an advisory panelist for The Money Map Report. An investment banker with more than 25 years’ experience, Hutchinson has worked on both Wall Street and Fleet Street and is a leading expert on the international financial market.

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Whenever I’m faced with a market like this one – rocky and volatile, with hidden wildcards just waiting to trip us up – I can’t help but think about my late grandmother, successful amateur investor Virginia Gruner, and the warning she would issue in just these situations: “Hold onto your bippies!”

As I sit here and stare at my trading screens this afternoon (Monday) – watching as central banks around the world inject billions into the global economy in an effort to blunt the effects of the spiraling credit crisis – I can just hear my grandmother issue her ever-so-familiar warning.

The Greatest Investor I’ve Ever Known

You see, my grandmother was a super-successful amateur investor.  She’d spent most of her adult life managing her household, the wife of a highly successful insurance-industry executive (my grandfather). When her husband died, my grandmother found that her family’s own finances were in disarray. So with characteristic commitment, and with a resolve I always admired, she set out to become a successful investor. She became one of the smartest individual investors most of us will ever see – and, actually, one of the best investors of any kind I have ever known.

My grandmother then set out to pass that “gift” along – to me. Starting when I was a teenager, she made sure that I always had the entire Value Line investment research series, and annual subscriptions to such leading publications as Business Week and Forbes. She wasn’t forcing this on me, mind you, but rather was sharing it with me – and in a way that made me want to learn all that I could, and be as successful at this wonderfully engaging pursuit as my grandmother.

Yesterday’s late-afternoon trading patterns suggest that her bit of wisdom may somehow be fitting to keep in mind over the next few days. I’m now hearing from traders based both here in the United States and around Europe that the $275 billion injected into the world economies by the global central banks may not be enough.

And, yet, Asia’s traders seem placated.
 
So, what gives?

I honestly don’t know. But here’s what my experience tells me should be happening – as well as what’s actually happening.

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The Global Realities

Somehow, the Euros and Americans don’t trust the system. They think that Monday’s rally is nothing more than a continuation of the short covering and limited bottom fishing that began Friday on the heels of nearly $275 billion in central bank liquidity injections

They’ve got a bad case of: “I’ll believe it when I see it.” And investors seemingly want the ECB and Fed to drop rates as a sign of good faith that things are truly behind us. Yesterday, in fact, I saw no fewer than 20 different news stories, research reports, and market essays from various people suggesting that a “Fed rate cut is in the bag” – which makes me suspect all the more that it isn’t.

Asian traders, on the other hand, seem to think that the massive amounts of money shot into the system was enough to fix the problem.

It’s the way that the Asian markets are trading that leads me to draw this conclusion – that, of course, plus the 20-plus years I’ve spent in and around the Asian markets.

The Japanese and Chinese in particular have a different cultural framework than we rely on here in the West. As a result, the Japanese have a sort of implicit trust in the government as a benevolent entity while the Chinese view it as a strict leader to be obeyed…maneuvered, but obeyed nonetheless. There are, of course, finer points to each but those are more academic than anything else.

In more practical terms, based on how the two camps (the West vs. Asia) appear to be divided in their trading philosophy right now, what we as individual investors are left with is a dichotomy: Roughly half the world’s financial system wants more “liquidity,” while the other half seems content with what it’s got.

Really Time to Go Global

So, who’s right and what does it mean for us?

That remains to be seen. I’m personally of the opinion that we have a long way to go before the extent of the damage is truly recognized. There will undoubtedly be some big names on the chopping block in the weeks to come as more light is shed on this messy credit situation. Some of these revelations will have been anticipated. But others will be huge surprises, and could well roil the markets.

Either way, this suggests to me that individual investors have yet another reason to focus at least part of their financial strategies on global investing (Wharton Professor Jeremy Siegel recently said that an international allotment of under 40% was a “disservice,” as well as a recipe for substantial underperformance).

That said, it’s clearly not enough any more to diversify by country because most of the countries, as so many people found out last week, are inextricably linked at the central banking level.

Therefore, it is vitally important to take a different approach that both lessens your risk and heightens your potential returns. Part of that approach includes lining up your money with the virtually unstoppable trends of our time. The other part suggests “an offensive defense” may be more appropriate now more than ever.

Last week’s financial shenanigans have clearly changed the rules of the game – yet again.

As I reason this all through, I can’t help but consider what my grandmother would say about this situation. The best revenge, of course, is to take advantage of all possible profit opportunities. But we all know that these next few weeks could be highly volatile, which either connotes danger or opportunity – depending upon your viewpoint.

So brace yourself for still more volatility (“hold onto your bippies!”). Then capitalize on whatever opportunities the financial markets throw at you. Look especially closely at global investment opportunities, but don’t be afraid to be opportunistic domestically, either. Be bold, but not reckless.

And have at it!

Good Investing to us all.

 Keith Fitz-Gerald

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If there’s one key to investing success, it’s this: Manage your risk.

If you take special care to protect the profits you have, and to keep your losses to a minimum, you’ll find that you can maximize your long-term profits. It’s a message I convey time and again. In fact, I just returned from the Agora Financial Conference in Vancouver, where I had the pleasure of presenting to packed audiences. I also especially enjoyed getting to speak to some of the other presenters – it’s always good to trade ideas and to hear what other analysts are thinking. And while I always present my market overviews at these events – and take pleasure in doing so – I make sure to remind investors of the fundamental rules for success and profit in stocks.

And don’t think that I ignore these fundamentals myself. Not a chance. Indeed, my strict adherence to these time-proven rules allowed some of the subscribers to my trading services to keep their short-term profits, and position themselves for some very nice long-term gains. Allow me to tell you what happened.

In several of the financial services that I manage, we completed our portfolio review and profit-taking several weeks ago – well ahead of the recent sell-off and ensuing volatility. I’d like to outline some of the broader moves we made, as well as the strategies behind them, and then tell you what to be looking for in the days and weeks to come.

Since that timely portfolio review, we’ve seen a large sell-off in energy stocks – despite the fact that crude oil keeps trading higher. Just yesterday (Thursday) crude oil traded above $77 a barrel and was within sight of its record high.

In fact – as if to ignore the spiraling price of crude oil – we’ve seen a large sell-off in energy stocks of late. And while oil prices rise, natural gas and gasoline have been weakening. Believe me when I tell you that oil is vulnerable to a strong correction, given the ample supplies in the absence of hurricanes (absent this season) or a troubling geopolitical event. With respect to the latter, Iran seems to be "behaving" better recently, although I would not count on this continuing.

We sold all our positions in which our short-term upside was very limited – and where we had sizable profits. And we kept the positions that had a very limited downside, but which also still had huge upside potential.

The bottom line: We ended up being very well protected against the ensuing market sell-off, and we avoided any major losses in our portfolio of stocks.

Let’s now look at what’s to come…..

The Credit Crunch

As we anticipated, ongoing concerns about the sub-prime mortgage problems are creating better buying opportunities in some sectors, and in some stocks. With the recent widespread losses a number of major hedge funds and financial institutions were forced to take because of sub-prime related investments, these major players were forced to de-leverage – a maneuver that forced them to raise cash by selling unrelated assets. These losses not only left these players with less capital to carry existing positions, it also left them with less capital to lend.

This is Economics 101: With a reduction in the available supply of credit, the price of that credit increased. And the price of that credit is its interest rate. We saw this play out across asset classes. For example, even though the yield on U.S. Treasuries achieved new recent lows, the rate on 10-year mortgages INCREASED. Similar effects were felt in the riskier spectrum of the debt markets, leading to a general re-pricing of credit spreads for the worse.

Add in the fact that banks are having problems placing key financing deals like the Cerberus Capital Management loans for the leveraged acquisition of automaker Chrysler, and you get the picture: The flow of liquidity that was financing these massive takeovers – while still there – has slowed, and is now more expensive.

All of this translates into lower expected equity valuations, as well as a slowdown in takeover activity for the future. Hence, the virtuous cycle of takeover pressure – which forced CEOs to either buy out other companies, or aggressively buy back their own stock to avoid becoming a takeover target themselves – is lessened.

Higher credit spreads also mean slower future economic growth, since it makes capital pricier and less available to Corporate America.

This combination of factors also shows a disruption in credit markets that at a later time might catch a big player off guard, creating a large default risk. Should something that significant occur, the Federal Reserve would likely have to step in and lower interest rates to stabilize the financial system – just as it did with the September 1998 rescue of Long-Term Capital Management, the vaunted hedge fund founded and run by Nobel laureates. But this time around, the Fed probably wouldn’t step in until after much pain had already been suffered.

In the meantime, I’m glad to see that the central bank is doing yeoman’s work, slowing inflation via higher credit spreads. And speaking of inflation…. it clearly must be getting closer to the Fed’s “secret” rate-reduction trigger point – whatever that might be – as the economy’s core PCE is about 1.4%, well within the Fed’s so-called “comfort zone” of 1% to 2%.

At the end of the day, the fundamentals are still very good for the U.S. economy. But our anticipated second-half recovery will be a bit-less pronounced than we’d hoped for – a new reality that justifies the market correction we saw.

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Markets to Watch

Investors can still profit, however. For instance, companies that are awash in cash and that do not need to tap the credit markets for costly additional capital right now will continue to march forward. Focus the closest on large-caps, high-tech firms, non-cyclicals, and those that pay high dividends.

U.S. companies are awash in cash, which is a key reason the government’s second-quarter Gross Domestic Product (GDP) report said there’s been a strong pickup in investment spending by businesses, which we’d earlier said to watch for. With that boost from business spending, high-tech companies in particular should enjoy a very strong second half of the year. Given that global competition is as intense as it’s ever been, U.S. companies will need to ratchet up their labor productivity to outpace their rivals from abroad, and the best way to do that is via high-tech investments. We are also at the very beginning of a new PC upgrade/replacement cycle, thanks to the new Microsoft Corp. (Nasdaq: MSFT) Vista operating system.

These new PCs will house new generations of the more-powerful dual, quad and octo chips built by Intel Corp. (Nasdaq: INTC) and Advanced Micro Devices Inc. (NYSE: AMD). These powerful processors will easily handle the anticipated massive surge in streaming video, data-laden telecommunications services, and other bulky applications that will be making their debut in the months and years to come.

International markets, too, hold much promise. One market we like is India, although there’s a challenge to overcome: It can be quite difficult to find opportunities to buy quality names at reasonable valuations there. But it’s better to wait – and buy at bargain prices – than to jump the gun, expecting instant satisfaction.

From an investment standpoint, Brazil represents an outstanding opportunity. The world’s seventh-largest economy and one of its four promising “BRIC” economies – Brazil, Russia, India and China – Brazil is a market that I know very well. This may well be your best chance to invest there.

Over the past decade, Brazil has transformed itself into one of the most-dynamic growth economies on the planet. The country has rock-solid fiscal and monetary policies, as well as a proven ability to meet inflation issues head-on – and defeat them.

But what’s really exciting about Brazil is the fact that the country is at the forefront of a massive consumer boom that is about to ignite economic growth and unleash a torrent of corporate profits.

And investors should not turn their backs on the U.S. market, either. While we are undergoing a correction of the less-than-ration “credit exuberance,” the fundamentals of the U.S. economy are still very strong. The only problem is that it will be almost impossible to say when this troubling problem will end, enabling the financial-services sector to halt its slide, rebound, and then race for higher ground – a prediction we analysts refer to as “calling a bottom.” Ideally, we’d all like to know just when the market bottoms out, so that we could go in and scoop up stocks at the bargain-basement prices.

Unfortunately, it’s clearly premature to “call a bottom,” given that the de-leveraging process that needs to take place usually takes some time to play out. And it will. But in the meantime, we must follow some very careful defensive-investing strategies. We’re also starting to see some much-more palatable valuations in the stocks that are on our “candidate” list – the ever-evolving list of stocks that we’re keeping an eye on for possible purchase. At some point we are going to start adding new positions, as the price of these shares fall enough to reach our “buy” points.

Until then, stay tuned.
Horacio R. Marquez is an Advisory Panelist for Money Morning, and is also the Investment Director of The Money Map Report. Marquez also operates several proprietary-trading services.

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