interest

Confidence that the Greek budget deficit problem may be improving helped to drive up demand for risky assets. This helped to boost U.S. stock indices. Traders were also becoming more confident about improvements in future corporate earnings because of the recent improvements in the economy.

Thursday saw shares fall once again led by banks and commodity stocks, added to this was concern over Greece's economic health. The US durable goods data also was weaker than expected, disappointing investor confidence in equities.

U.S. equity markets are expected to open stronger as traders renew their demand for higher risk, higher yielding assets. Without any economic reports to concern investors, expectations are trend day. There may be a break early in the session as U.S. traders have been reluctant to chase this market after higher openings. Earnings season begins after the close today.

The U.S. Dollar erased early overnight losses and is now trading higher after China shocked the Forex markets with a surprise hike in interest rates. China’s move to curb excessive lending and curtail price increases drove traders into lower yielding, safe haven currencies. China’s central bank sold 3-month bills at a higher interest rate for the first time in 19 weeks.

This is the work of Mother Nature’s financial twin sister. It’s like acorns, snowfalls, and crocuses. You need to dress properly for seasonal changes and invest properly for cyclical changes. Remember the days of Bearer Bonds? There was never a whisper about Market Value erosion. Was it the IRS or Institutional Wall Street that took them away?

The U.S. Dollar hit a 15-month low against a basket of currencies last night on the prospect the Fed will keep interest rates at low levels for a prolonged period of time. This assumption is based on last week’s Fed FOMC statement and recent comments from a Fed official suggesting that unemployment is the major concern.

The U.S. Dollar finished sharply lower today against most major currencies except the Japanese Yen. Speculators bet early and often this morning that the Fed would do nothing with interest rates nor hint at an end to its stimulus plans. These bets paid off as the Dollar weakened further after the FOMC announcement in the afternoon.

U.S. GDP improved to 3.5%. This figure marked the first gain in over a year and was better than pre-report guesses of 3.2%. Trader appetite for risk soared after the report was released.

The fewer IGV stocks at bargain prices, the stronger the market, and the more profit taking WCM methodology investors should be experiencing. The most important thing most investors fail to do during rallies is to prepare for their "supplantation" by the next correction.

The U.S. Dollar lost ground against all major currencies as record low U.S. interest rates encouraged the selling of the Dollar and the buying of higher yielding assets. Overnight the Dollar firmed until a better than expected U.S. Weekly Initial Claims Report helped put in a top and set off a gradual decline throughout the day.

The IGVSI tracks a portfolio of approximately 400 stocks--- and less than half of them are likely to be found in the S & P 500 average.

The U.S. Federal Reserve kept its benchmark interest rate unchanged at the 0.25%-0% range. “Information received since the Federal Open Market Committee met in March indicates that the economy has continued to contract, though the pace of contraction appears to be somewhat slower”, the Fed said.

The Working Capital Model looks at investment performance differently, less emotionally, and without much concern for short-term market value movements. Security market values are used for buy/sell decision-making. Working capital figures are used for asset allocation and diversification calculations.

Appreciating Basic Risk Minimization Techniques. a) Understanding the purpose and use of Asset Allocation; b) Developing appropriate security selection criteria; c) Establish diversification and income rules; d) Adopting downward flexible profit taking guidelines.

Unfortunately, investors are a lot like teenagers. They know everything; expect instant gratification; take unnecessary risks; fall in love easily; ignore voices of experience; prefer the easy approach. Lessons of the past just can't apply to what's going on now. Duh, dude!