By Keith Fitz-Gerald In a Money Morning commentary back in April, I suggested that while we’d hit a new market bottom, we almost certainly hadn’t hit the market bottom. So have we now? That’s tough to say, although three seemingly unrelated bits of data suggest the ultimate market bottom may be lower still, meaning investors aren’t out of the woods, yet. Let’s take a look: Since 1990, there have been 13 declines of 10% or more in the Standard & Poor’s 500 Index. And while each drop of this magnitude tends to precede a rally of six months or more, an ultimate market bottom typically hasn’t been established until we’ve seen an average reading of 36.3 in the Chicago Board Options Exchange Volatility Index - usually referred to as the VIX Index. Generally regarded as a ...

By Keith Fitz-Gerald Investment Director Money Morning/The Money Map Report Every market cycle has its genius. Even a market cycle as wild and volatile as this one has been. And the latest genius might be just what the U.S. Federal Reserve needs to restore order around here: She might even be able to bring credibility back to the global financial markets. Elizabeth Duke goes by "Patsy." And while the nickname may be soft, the person behind the moniker isn’t soft. In fact, we believe that Patsy Duke - a career commercial banker - is the only Federal Reserve insider that understands how the global money markets actually work. As such, she might just be the next central bank chairman. We say that because, unlike current Fed Chairman Ben S. Bernanke and the rest of the Beltway Boys - all of them academic theoreticians, data experts, or ...

By Keith Fitz-Gerald Investment Director Money Morning/The Money Map Report We can almost hear that ominous "Jaws" theme music in the background and can see that huge dorsal fin as it slices threateningly through the water - knowing full well that the real terror is hidden beneath the water’s surface. But this time around, it’s not a "Great White" that’s sparking our fears; it’s a well-capitalized and broadly based series of secret stock exchanges known as "Dark Pools of Liquidity," "Dark Liquidity," or just "Dark Pools." Most investors have never even heard the term - and are truly shocked to discover these "off-the-books" trading networks actually exist. But to Wall Street insiders looking to anonymously move billions of dollars in stocks, bonds, and other investment instruments, dark pools are de rigueur - especially when you’re an institutional trader who doesn’t want ...

By Keith Fitz-Gerald Investment Director Money Morning/The Money Map Report One of the things people don’t understand about buying gold for diversification is that it doesn’t work all the time. It works over time. That means that you can’t simply switch from one asset class to another when the going gets tough and expect miracles. Nor can you expect higher returns. And that’s the really cruel part. Many so-called alternative investments, gold being the most notable, are being sold right now on the basis of recent high returns to salivating investors desperate to stop the bleeding in their portfolios. No question, the yellow metal offers diversification; but near all time highs, its “protection” is debatable at best, when viewed against the harsh light of historical data. Which is why, at the risk of receiving some very testy email, we have to point out that if you bought ...

By William Patalon III Executive Editor Money Morning/The Money Map Report Can it be earnings season already? It sure is, but don’t expect too much. With its report tomorrow (Tuesday), Alcoa Inc. (AA) leads off what is expected to be a pretty dismal series of profit reports. Thomson Reuters now estimates that second-quarter earnings declined by 11.1%, which is significantly worse than the projected 2% decline that was made back in April. Of course, financials will lead the charge in terms of these dire expectations, followed closely behind by consumer discretionary (which reflects the lagging confidence measures).  Technology is also expected to struggle; these days management must think long and hard about investing in any major systems upgrades. But the real key to the stock market’s future may well lay with major multinationals. In recent quarters, many multinational companies - we often ...

By Keith Fitz-Gerald Investment Director Money Morning/The Money Map Report The Dow Jones Industrial Average is already in the bear’s grasp. And the U.S. economy may well be headed for a recession. But here’s the ultimate irony: Bear-market investing offers a direct pathway to the biggest profit opportunities most investors will ever see. History shows time and again that the worst returns come to those who buy at - or even near - market peaks, like those of 1928, 1969, 1999 and 2007, when Price/Earnings (P/E) ratios are typically higher than “normal.” Conversely, investors who buy when the days are darkest reap the best returns: Think 1932, 1942, 1982, 2003 and - take a deep breath - possibly 2008. Clearly, at a point when the world looks like it’s going to hell in a hand basket, sitting on the ...

By Keith Fitz-Gerald Investment Director Money Morning/The Money Map Report For investors who are used to living large, this has been the year from hell. The markets are tanking. Food costs 25% more than it did a year ago. Inflation is on the march for the first time in decades. The sky’s the limit on gasoline after oil prices have doubled in the year. No doubt about it: As far as financial downturns go, this mess is the real deal. With that in mind, we’ve taken the time to provide you with candid answers to four questions we’ve been asked time and again. And that’s not all. We used those questions to craft a three-step strategy that will give you the returns you seek, without forcing you to "bet the ranch." Q: How Bad Are Things Right Now? A: Let’s not mince words, here - they’re bad. Our ...

By William Patalon III Executive Editor Money Morning/The Money Map Report With the Dow Jones Industrial Average down 20% from its October peak - placing it firmly in bear-market territory after what’s so far been its worst June since the Great Depression - neither institutional traders nor individual investors seem able to find anything positive about the economy, corporate climate or financial markets. The subprime-mortgage mess and the ensuing credit crisis continues to exact a toll on the financial-services sector, meaning we can be certain those write-downs won’t be ending anytime soon. Oil prices can’t seem to find a ceiling as new records are again being set - regardless of whether you choose to call it market fundamentals or speculation. The U.S. Federal Reserve surveyed the financial landscape last week and left interest rates unchanged for the time since September as ...

By William Patalon III Executive Editor Money Morning/The Money Map Report Oil and jet-fuel prices are in the stratosphere, many of the world’s top airlines have ordered severe cutbacks, and passenger traffic is falling, so why is Dubai funneling 82 billion of its petrodollars into an aerospace project that includes plans for the world’s largest airport? The answer is simple. Dubai isn’t concerned about the near-term turbulence that has sent global investors diving for cover and induced airline-industry executives to hanger portions of their jetliner fleets. The leaders of that Middle Eastern country have taken a long and studious look at the powerful global trends that are destined to play out over the next 20, 30 or even 40 years, and have crafted their plans accordingly. In a broad sense, that focus on the long term is a lesson U.S. investors would be ...

By Keith Fitz-Gerald Investment Director Money Morning/The Money Map Report Japanese companies and local governments must now measure the waistlines of all employees and family members over the age of 40. According to this new health-care initiative - which started this week - men whose girth exceeds 33.5 inches and women whose waistlines exceed 35.5 inches are considered overweight. The new guidelines affect nearly 56 million people, or roughly 44% of Japan’s total population. They’re based on studies done by the International Diabetes Foundation in 2005, which looked at size and weight thresholds and used them to identify health risks. Individuals who fail to meet these standards won’t be penalized or have to pay up personally. But their employers will - in the form of penalty payments and higher health-care premiums for every additional inch - thanks to this new waistline law that’s ...