With a much anticipated deal worked out at the last minute by the Congress to raise the Debt Ceiling until February 7, 2014, stocks rallied again to the high levels reached two weeks ago. While this is a great relief to many, this short-term answer is not addressing the real question: “How does the U.S. stop incurring more debt and start paying off the $17 trillion it owes?” The political processes required to reduce our National Debt are going to be painful but necessary.
As long-term investors, we’ve seen this “movie” before and will see it again. The most important thing to remember is not to be distracted by the political “games,” but rather to persist in our long-term investment plans. And we must apply sound long-term strategies such as optimal asset allocation and risk management strategies like TSOA Freedom Portfolios to manage all our investment accounts, especially our retirement portfolios.
Any continuation of this 4-year stock market rally depends on expectations of stronger economic growth and profits. Now as earning season reporting begins, the stock market will soon refocus on forecasts by companies of their future profitability. This is what really matters to your financial future.
Hence, there is no change in our TSOA Freedom Portfolio allocations. Our decision to stay away from any investments in long-term and medium-term bonds remains.
Our Fun Stocks Index has regained its momentum despite the volatile markets of the past week. Its performance is still excellent as compared to the major indexes:
Performance of Indexes (Jan. 1, 2013 to Oct. 16, 2013)
- Fun Stocks Index……………….up 56.7%
- S&P 500 (SPY ETF) Index……up 20.8%
- Dow Jones (DIA ETF) Index…up 17.6%
- NASDAQ (QQQ ETF) Index…up 23.4%
You can click here to learn how to build your own Fun Stocks Index.
Have a great week!
Remember that past performance of any investment is not an indicator or guarantee of future results.