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New Bull Market Here; Buy Before It Is Too Late

Monday, 23 Mar 2009 01:15 PM

Stock prices rallied for the second week in a row last week for the first time in more than a year, as two key leading economic indicators turned positive and the Federal Reserve announced that it’s taking additional steps to unclog the credit markets.

More specifically, construction of new homes rose during February, after declining during each of the past seven months and initial claims for unemployment benefits continued to trend lower after peaking at 670,000 during the week ended Feb. 20.

Meanwhile, the Federal Reserve announced last week that it plans to increase its purchases of mortgage-backed securities up to an additional $750 billion, bringing its total purchases of those securities to up to $1.25 trillion this year. The Fed also said that it’s expanding the types of collateral that the Fed will accept for its Term Asset-Backed Securities Loan Facility (TALF).

Separately, the U.S. Treasury Department announced on March 23 that it will soon implement a new public-private partnership to buy so-called toxic assets (illiquid mortgage-backed securities and non-performing loans) from financial institutions.

The Treasury Department anticipates that its partnership with private institutional investors will unload as much as $1 trillion of distressed assets from the balance sheets of commercial banks and other financial institutions. That would be a very positive development, as it would significantly improve credit conditions in the United States.

Although many money managers, economists, and financial pundits are claiming that the two-week rally in the U.S. equities market was merely a rally in a bear market, my models indicate that a new bull market has begun.

By the way, the so-called “experts” that are making those claims are the same persons that told investors a year ago that the economy was in sound shape and that investors should be adding to their stock portfolios because stocks were “cheap.”

I, on the other hand, advised subscribers to my investment newsletter, throughout much of 2008 to sell stocks short and to hold a large portion of their assets in cash. In other words, I helped subscribers preserve most of their capital during 2008, while all but a few mutual fund managers caused their funds’ shareholders to lose between 25 percent and 50 percent of their hard-earned retirement savings.

Go Here for more of David Frazier's market insights and investment advice - Get the 'Secret Code' today!

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Stock prices rallied for the second week in a row last week for the first time in more than a year, as two key leading economic indicators turned positive and the Federal Reserve announced that it’s taking additional steps to unclog the credit markets.More specifically,...
david,frazier,bull,market
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2009-15-23
Monday, 23 Mar 2009 01:15 PM
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