Death Throes

Witness an animal is in the final throes of a violent death and you become voyeur to a world of pain, fright, uncertainty and generally outright terror. These descriptors could easily be taken from the headlines of any current financial publication today and not seem out of line with what we perceive to be happening in the financial markets. Is this market in the death throes? In a manner of speaking, yes. When volatility violently returns to the markets(just pick one) as weve been witness to over the last month, its a clear sign that whats gone before-whether its the meteoric, but steady rise from the ashes as this market has experienced over the last 12 months-is about to change. Tell us something we dont know, smarty pants.

The truth is, that as sudden as this has been, it has not been without warning. Im not referring to the warnings you get from CNBC or your evening news.these are all historical viewsof the worst kind. Theyre really really late, and do nothing to calm the rising panic. Panic, in this case sells papers and provides ad revenue. In times like these and like the ones to come, its important to keep your head and act decisively. If somehow you determine in light of new information, a decision youve made is flawed, change it. These types of markets require you to remain nimble and vigilant. In my post Death of Buy and Hold, I reference the use of market moving averages to provide guidance as to what to do with your investments in a general sense. Allow me to explain. Pick your market. By reading the tea leaves of these averages, you gather whether a given market is signalling all in or stand aside. For the specific details, youll have to purchase FinancialSAs core product. Suffice to say that the current death throes as I refer to this volatility, is a warning. While death throes may have the ring of melodrama, the intent is to convey with sufficient urgency, that in spite of all the pronouncements of economic recovery, TRILLION dollar aid packages and additional bailout requests, such as from our largest mortgage holder(FMAE), seem to becoming more acceptable. Certainly more common place. The need for more of these is growing faster. GM, BofA, AIG, CITI.Greece is just the latest in the spate of entities refusing to balance their economic check books. You could say, the violent thrashing is the markets response to this refusal. What I want to leave you with, is this. The fact that these numbers are being bandied around in every news cast or financial headline has the dangerous condition of lulling you into a sense of inaction. Trust me when I tell you, the one thing no one is mentioning is that all these aid packages you keep hearing of are bigger than the previous ones. The end is not in sight either. Greeces populace have not taken kindly to being told they will have to finally balance their check book. Their problems and by extension, world markets problems are far from over.No market ever goes straight down, or straight up, for long. Like my tennis analogy made in previous posts, focus on the value of your investments and how they respond to this volatility. Increasing your financial SA will help you take specific action fast. This economic fish has been hooked and brought into the boat. The thrashing about your investments are experiencing signal a call for action. Pay attention before you get blood all over you.