Predictions As To Where This Economy Is Heading In 2011

							             By Ed Mitchell
www.freefinancialconsultation.com
   January's stock market (whether it goes up or
    down), is usually a forecast as to how the market
    is going to go for the rest of the year.

   The Dow closed on Monday up 130 points, at
    11700. The rest of the week was less impressive
    closing on Friday at 11619, not a good sign.
   There is a lot of uneasiness in the market
    place. Trillions of dollars are sitting on the
    sidelines in cash & money market accounts
    remaining risk free & liquid. Investors are still
    uncertain as to where this economy is
    heading.
   Unemployment, reported at 9.4%, is more
    realistically 16-18%, taking into account
    those who have given up looking for work.
    Gasoline is over $3 a gallon, and could well
    reach $4 before the end of the year. The
    drilling in the gulf is over, & our dependence
    on foreign oil from countries that have no
    love for the US, (read Venezuela, Iran, Mexico,
    etc.) will be an ongoing problem.
   So what are we to do? Continue to keep our
    money in safe non-growing, risk averse
    areas, or should we look to invest in
    commodities & emerging markets like China,
    India & Brazil?
   Many Exchange Traded Funds (ETF's) have
    shown amazing growth this past year.
    Emerging markets have done well, S. Korea
    (EWY), was up over 25%, Russia (TRF) was up
    22%. Many Sector ETF's did well also, Large
    Cap Tech (QQQQ), was up over 20%,
    Transportation (IYT) up over 24%. Equities in
    2010 did fairly well, but will this growth be
    sustainable in 2011? That's the unanswered
    question.
   Proponents of the Elliot Wave Theory, a form
    of technical analysis put forth by Ralph N.
    Elliot in the 1930's are not so optimistic.
    Elliot proposed that market prices unfold in
    specific patterns by identifying extremes in
    investor psychology. Though an accountant
    by training, he was an avid analyst of the
    stock market as well.
   A major market correction of over 50% is
    projected by certain Wave Theorists in late
    spring/early summer 2011. This would bring
    the Dow down to the 6000 point range. A
    devastating scenario for those currently
    invested.
   As the year unfolds, it is recommended you
    meet with your Financial Advisor for an in
    depth portfolio review and analysis. Getting
    expert advise is critical for today’s climate.
   Author: Ed Mitchell,
    Registered Investment Advisor

    

   www.freefinancialconsultation.com