Thoughts of Labor Day: Sunday Morning Thoughts 05 September 2010

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This holiday we will all be celebrating has been in American history since 1882, but became a federal holiday in 1894.  It was granted as a federal holiday to help mend the outcome of the Pullman Strike.

The original intentions were to show camaraderie among trade and labor organizations with a parade then a festival for the workers and their families.

Today Labor Day means, we have the day off (for most people), watch T.V. – normally a game, baseball, football, basketball, NASCAR, and have BBQ with family and friends.

This is a big change from what it originally started.  Have labor organizations achieved everything in employment so there is not a need to remember the significance of the start of this holiday?

Far from the truth.

U. S. unemployment is at 9.6% according to the August 2010 stats.  It’s the common man who is suffering from the foreclosure crisis.  Our current economy is broken and will need more fixing as time continues.

But one thing history teaches us is that time will change and all things will improve.

Consumerism will make a huge comeback with the loosening of credit, and the economy, with all the hiccups, will find its way back as well.

Being on the right side of the recovery, doing the right type of investing is the difference between shoulda, woulda, coulda and profit.  Jack Rabbit investing does not make a profit, but can cause a lot of loss.

The stock market now shows signs of the beginning of a ‘heat up’, but as with history, dip thongs in the market are going to continue for a while.

Our Topsy Turvy Economy

With the stepping down of Obama’s lead financial advisor Christina Romer one would begin to wonder who will take her place.   According to Reuters there are three candidates Austan Goolsbee, Jared Berstein, and Laura Tyson.

This news of a prominent member of Obama’s financial advisory will possibly impact the stock markets, causing foreign investors to be more apprehensive of America’s economic recovery.

This new change in the presidential financial advisory, mixed with higher unemployment and stagnant growth in many sectors, the stock market for Friday will likely end down.

But the cycle for this month of August is a negative ending of the DOW.  This prediction is based on previous cycles.  When looking at the previous cycles of the month of August plus lagging unemployment, sluggish consumerism, and the dollar losing more value it is not hard to predict that the month of August for the DOW will be a non gaining month.

Conversely, tangible assets are going up at a steady pace.  Gold and silver are gaining more on a daily basis.

Real estate is not too far behind with some markets seeing some slight increase in price.  Although another wave of foreclosures in residential and commercial will soon be coming.

Warren Buffett defined the difference between investing and speculation in this famous passage from his book, The Intelligent Investor:

The most realistic distinction between the investor and the speculator is found in their attitude toward stock-market movements. The speculator’s primary interest lies in anticipating and profiting from market fluctuations. The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices. Market movements are important to him in a practical sense, because they alternately create low price levels, at which he would be wise to buy, and high price levels, at which he certainly should refrain from buying and probably would be wise to sell.

Now is the time to invest in real estate.  Take advantage of the market being low and having an abundance of real estate that is due to appreciate.  For more information on how to take advantage of our current real estate market http://www.BackedByRealEstate.com