Market Direction Looking Forward To 2013

Happy New Year! 2012 was one of the best years for returns. The three corrections and subsequent rallies boosted my portfolio to one of the best gains since 2009. Whether 2013 can provide the same returns is tough to call at this point. Market direction presently remains up. The passing of the budget deal to remove the threat of increased taxes by the Senate and Congress this evening is a major step in keeping the market direction up. I would expect some further rallying before the market stops to catch its breath.

Market Direction For 2013 Pros

Market Direction for 2013 has a lot going for it. The Federal Reserve is continuing to pump in billions of dollars and has set a guideline for when investors should expect the historic low-interest rates to end. This gives some concrete footing to the continuation of the bull market that started in March 2009.

As well 80 percent of corporations have refinanced their short and long-term debts at historic low levels. Many corporations floated corporate bonds below 3% for 10, 20 and 30 year periods. This too will assist the market direction and individual stock direction for many stocks.

Another pro for the market direction continuing higher is that many of these same corporations have trimmed their excesses, streamlined employment levels and put in place extremely efficient manufacturing, distribution and marketing policies and systems. The majority of corporate America is lean and in excellent condition. Another plus for market direction is the wide moat of cash that many corporations are holding. Hundreds of billions of dollars are in corporate accounts which can assist in a downturn or a retooling.

Another plus for market direction is the number of bearish investors remains reasonably high. Many investors remain convinced that stocks should have crashed in 2012. They are adamant that the US economy is not doing well and that Europe remains fragile and on the brink of falling apart. They point to the recent collapse of Apple Stock as a significant signal that the bull market is ending. All this negativity is good for stocks.

Market Direction For 2013 Cons

There are far more cons than pros for market direction falling. The fiscal cliff issue although only partly resolved is just the first of many budget battles yet to be fought. The US deficit must be dealt with but there are no easy solutions. The National Debt is quoted as being anywhere from 25 to 55 trillion dollars as it seems that no one truly knows for sure. The debt ceiling needs to be renegotiated.

Market Direction could take a hit from Christmas Sales figures that may show only a slight gain over last year rather than the 4% many analysts had predicted.

Market direction may also be stunned with the next quarterly earnings start to arrive as they may continue to show more weakness than in the third quarter where many large cap stocks faltered and pulled back starting the second correction of 2012.

Corporations have trimmed their expenses to the max. They have also refinanced at the lowest interest rates in US history. To continue to support higher stock valuations in the long-run, corporations must earn more in 2013 than they did in 2012 and most need an increase of 10% to 15% to justify higher stock prices. What are the chances corporations can reach those goals and what other cost savings measures are left?

Market Direction Outlook

The market direction outlook then is murky but stocks have surprised to the upside before. Once the euphoria over the partial resolution of the fiscal cliff debacle wears thin, we should have a better idea as to the market direction. Until then though staying invested and remaining with consistently winning strategies will be my focus.

Forget The Doom Sayers

The fall of 2012 has seen the return of the doom sayers. Everything from bearish horns, to non-confirmations from the Russell 2000, to tea leaves at Aunt Rosie’s are being quoted as tell-tale signs of an impending collapse. Forget all the doom and gloom. Today with media outlets, websites, television, streaming, radio and much more, investors are constantly bombarded by negativity. This is because negativity sells. It sells books, brings people to blogs where they angrily leave comments which in turn brings in ad revenue for websites, it keeps an audience glued to their televisions and they keep investors away from what is important – their investment strategies.

Consider 2013 As The Year Of Strategies

Don’t fear the market direction but instead vow that this year you will earn profit in any market direction, up or down. Stay focused and learn strategies that you understand and can implement easily. Only use strategies that suit your method or style of investing.

Consider studying the market direction portfolio which using the Ultra ETFs for up and down markets. Contemplate learning the Spy Puts Hedge or the Trading For Pennies Strategy to profit from market direction, again up or down.

Think about the value of having a plan and setting up solid strategies. Consider how valuable in the money covered calls are to get out of assigned stock as quickly as possible, so you can get your capital back out working for you every day.

Let 2013 be the year you learn support and resistance techniques so you can learn to sell puts only at support and buy them back at resistance.

Stay Focused and Consistent – Remember Planning Works

As we work our way through 2013 stay focused on quality, large cap dividend paying stocks with solid balance sheets. Stay consistently with strategies that are providing profits and stop strategies that are losing capital. Finally, remember that planning works. The importance of having a plan and the importance of strategy cannot be understated. I cannot judge what problems and dangers 2013 will bring for my investments, but I do know that because I have goals and strategies that provide profit and protection I will be just fine.

I also know that when I focus on capital preservation, the profits will take care of themselves.

Best Wishes for a healthy, happy and prosperous 2013 and thanks to everyone for your support of FullyInformed.com. I just know we will have a lot of fun together in 2013!