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MARKET ALERT 2/5/2010
The following is a strategy update for CSL Financial Clients. The update has been prepared by Bradford Hansen.
Greetings!
I wanted to give you a quick update on the global markets as well as our current overall strategy here at CSL Financial. I will try to keep this brief and to the point, I apologize in advance for what some would call my radical honesty.
The sovereign debt crisis has begun and the markets are taking note. Currently in the headlines are Portugal, Spain, and Greece. Behind the headlines, specifically in Davos last week, global leaders were talking about the debt crisis here in the U.S. and UK.
Gold, despite the short term so called “flight to quality” into U.S T-Bills, gold is without a doubt the safest currency to be in right now. Will it experience high volatility over the coming months? Absolutely, as governments around the world have been attempting to print their way to prosperity, gold has risen 300% in the last decade. During this collapse in value for fiat currencies, gold still had a 2006 downside correction of 20% and in 2008 gold saw a down move of more than 25%. So, don’t be surprised if gold see’s another volatile year before heading into the stratosphere. Currently, gold is around $1,050 or down 13% from its all time high set just a few months ago. I expect investors to once again foolishly run to the dollar as they seek the high ground from the debt tsunami. Unfortunately for them, in my opinion, all they are doing is running towards the beach unable to see because of the crowd in front of them. Meanwhile central banks around the world are buying up gold like never before. Why? Because the fundamentals for the dollar have never been worse.
- Tax revenues are down
- Social Security will go negative this year, not officially because of data entries, but in reality, it’s now broke. (so much for those 2085 projections)
- Deficits are accelerating
- Mandatory spending is now 2/3rds of the U.S budget
- The driving force for the U.S. economy for the last 30 years has been baby boomer spending and a constant credit expansion, both are contracting.
- Local, regional, and state governments across the U.S. are preparing for more job cuts, pay cuts, and possible tax increases. We will also see a wave of government defaults sweep this nation over the next few years, probably starting later this year.
- BRIC nations continue to call for a new world reserve currency.
- Moody’s warns U.S. credit rating in jeopardy.
Looking back at the year 2000 when gold was closer to 300 an ounce the problems the U.S. faced looked like a walk in the park compared to the situation we face today. This is why I believe investors should hold gold and gold mining funds. The temptation to have nominal value protection will cause gold to go down, but in the end, it will be gold that survives the sovereign debt crisis.
In regards to our foreign bond holdings, I want everyone to know that I didn’t just get anyone to manage these holdings. The funds that we are in that hold foreign bonds reflect our strategy, not wall streets. The main funds we hold are managed by like minded individuals who are focused on systemic risk. In fact one of our foreign bond funds even holds some gold. For those not familiar with bond funds, finding someone who doesn’t go with the status quo isn’t easy.
Has the 2009 Bear market rally ended? I can’t make any promises, but I do feel that our Bear funds will do great this year. Our bear fund strategy will not only protect us from short term asset deflation, but can potentially bring in some hefty profits. For those of you who have not taken advantage of our Bear funds and are interested please contact me directly as soon as possible. Depending on your personal situation I believe a good bear fund or two should represent 10-20% of your overall portfolio this year. For perspective on how my opinion has changed, for the entire year of 2009 I thought bear funds should only represent 2-5% of our portfolios.
Asia: Asia will more than likely follow the U.S. markets this year, as will most assets. The U.S. is still the big mover when it comes to the overall direction of asset prices. I have always been clear that Asia is a long term investment that will reap great rewards to those who are patient. You know why I’m a bull in Asia, so let me tell you why I’m not selling due to expected short term volatility. By Investing in Asia I get the best of both worlds, I get fundamentally sound businesses and I am fully diversified out of the dollar. Though I will more than likely see downside moves in the coming months, I will sleep well and night knowing that when the sun officially sets on the dollar, I will already be safely watching the sun rise in Asia. In fact in a scenario where there is a run on the dollar, Asian currencies will explode to the upside. Asian citizens will experience the purchasing power only known to western nations. I guess in the simplest terms, now is the time to exchange your dollars for Asian companies.
To sum it up, I believe a pragmatic portfolio that is truly diversified is the way to go for 2010. We need to prepare for major national defaults, short term asset deflation, economic recession, and any change in the dollars world reserve status. As always, I will continue to focus on the fundamentals and not market hype. My promise to you is the truth, dedicated research, and a commitment to be on the cutting edge when it comes to your personal investment strategy.
Talk to you soon,
Brad
P.S. For those of you who have friends or family that need help, please take a moment to let them know about Cslfinancialgroup.net Thanks!
Bradford S. Hansen
Ph: 760-949-7176
Fax: 760-650-7327
http://www.cslfinancialgroup.net
Bradford S. Hansen is a registered representative with and securities offered through LPL Financial, member FINRA/SIPC.
End of Email
The following is a strategy update for CSL Financial Clients. The update has been prepared by Bradford Hansen.
Greetings!
I wanted to give you a quick update on the global markets as well as our current overall strategy here at CSL Financial. I will try to keep this brief and to the point, I apologize in advance for what some would call my radical honesty.
The sovereign debt crisis has begun and the markets are taking note. Currently in the headlines are Portugal, Spain, and Greece. Behind the headlines, specifically in Davos last week, global leaders were talking about the debt crisis here in the U.S. and UK.
Gold, despite the short term so called “flight to quality” into U.S T-Bills, gold is without a doubt the safest currency to be in right now. Will it experience high volatility over the coming months? Absolutely, as governments around the world have been attempting to print their way to prosperity, gold has risen 300% in the last decade. During this collapse in value for fiat currencies, gold still had a 2006 downside correction of 20% and in 2008 gold saw a down move of more than 25%. So, don’t be surprised if gold see’s another volatile year before heading into the stratosphere. Currently, gold is around $1,050 or down 13% from its all time high set just a few months ago. I expect investors to once again foolishly run to the dollar as they seek the high ground from the debt tsunami. Unfortunately for them, in my opinion, all they are doing is running towards the beach unable to see because of the crowd in front of them. Meanwhile central banks around the world are buying up gold like never before. Why? Because the fundamentals for the dollar have never been worse.
- Tax revenues are down
- Social Security will go negative this year, not officially because of data entries, but in reality, it’s now broke. (so much for those 2085 projections)
- Deficits are accelerating
- Mandatory spending is now 2/3rds of the U.S budget
- The driving force for the U.S. economy for the last 30 years has been baby boomer spending and a constant credit expansion, both are contracting.
- Local, regional, and state governments across the U.S. are preparing for more job cuts, pay cuts, and possible tax increases. We will also see a wave of government defaults sweep this nation over the next few years, probably starting later this year.
- BRIC nations continue to call for a new world reserve currency.
- Moody’s warns U.S. credit rating in jeopardy.
Looking back at the year 2000 when gold was closer to 300 an ounce the problems the U.S. faced looked like a walk in the park compared to the situation we face today. This is why I believe investors should hold gold and gold mining funds. The temptation to have nominal value protection will cause gold to go down, but in the end, it will be gold that survives the sovereign debt crisis.
In regards to our foreign bond holdings, I want everyone to know that I didn’t just get anyone to manage these holdings. The funds that we are in that hold foreign bonds reflect our strategy, not wall streets. The main funds we hold are managed by like minded individuals who are focused on systemic risk. In fact one of our foreign bond funds even holds some gold. For those not familiar with bond funds, finding someone who doesn’t go with the status quo isn’t easy.
Has the 2009 Bear market rally ended? I can’t make any promises, but I do feel that our Bear funds will do great this year. Our bear fund strategy will not only protect us from short term asset deflation, but can potentially bring in some hefty profits. For those of you who have not taken advantage of our Bear funds and are interested please contact me directly as soon as possible. Depending on your personal situation I believe a good bear fund or two should represent 10-20% of your overall portfolio this year. For perspective on how my opinion has changed, for the entire year of 2009 I thought bear funds should only represent 2-5% of our portfolios.
Asia: Asia will more than likely follow the U.S. markets this year, as will most assets. The U.S. is still the big mover when it comes to the overall direction of asset prices. I have always been clear that Asia is a long term investment that will reap great rewards to those who are patient. You know why I’m a bull in Asia, so let me tell you why I’m not selling due to expected short term volatility. By Investing in Asia I get the best of both worlds, I get fundamentally sound businesses and I am fully diversified out of the dollar. Though I will more than likely see downside moves in the coming months, I will sleep well and night knowing that when the sun officially sets on the dollar, I will already be safely watching the sun rise in Asia. In fact in a scenario where there is a run on the dollar, Asian currencies will explode to the upside. Asian citizens will experience the purchasing power only known to western nations. I guess in the simplest terms, now is the time to exchange your dollars for Asian companies.
To sum it up, I believe a pragmatic portfolio that is truly diversified is the way to go for 2010. We need to prepare for major national defaults, short term asset deflation, economic recession, and any change in the dollars world reserve status. As always, I will continue to focus on the fundamentals and not market hype. My promise to you is the truth, dedicated research, and a commitment to be on the cutting edge when it comes to your personal investment strategy.
Talk to you soon,
Brad
P.S. For those of you who have friends or family that need help, please take a moment to let them know about Cslfinancialgroup.net Thanks!
Bradford S. Hansen
Ph: 760-949-7176
Fax: 760-650-7327
http://www.cslfinancialgroup.net
Bradford S. Hansen is a registered representative with and securities offered through LPL Financial, member FINRA/SIPC.
End of Email
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