Post Election Market Expectations

          Sorry for the haitus, but I was sitting around thinking about the big pull back I was hoping for in October, but that did not happen.  I was hoping for a 10% pull back, but we only saw about a 2.5% pull back.  Now that O'Bama has his mulligan intact, what should we expect?  Just for clarification purposes, the O'Bama comment was no indication that I support Mitt or the Republicans.  I am non-partisan.  Now, back to business.

          So, the market will not be good to the long or short term investor of the broad market.  All of your 401(k) accounts will take a pretty good shot, unless you are in a stable fund with a quarterly adjusted interest rate.  I do not think we will see the affect on stable funds that we saw in 2008, when they lost money for the first time in history. 

          For my portfolio of both deferred compensation and my brokerage account, I've been rotating money to safer territory and building my cash up in order to take advantage of the larger pull back that await us in 2013.  I firmly believe, as I did in 2008, that the earnings reports (even in the Christmas shopping season is a success) for 4th quarter 2012 will be poor, thus bringing the broader market down. 

          What adds to the problem, is that with O'Bama at the helm, interest rates will cotinue to stay low and deficeit spending will remain high.  Money will continue to be printed, to the tune of about $1T per year, which will weaken the dollar and increase inflation.  Investing gold and oil will help hedge against inflation.  Since wages are stagnant, it is not wise to sit and do nothing while the cost of every day staples and energy start rises at an ever increasing rate.

          There is some good news, though.  With interest rates remaining low for the next two to four years, obtaining financing will remain cheap.  The best thing to do with cheap credit is to consolidate expensive credit.  Pay down your debts, but at the same time, increase your savings and continue to invest.  For the 99% of us, that is the best way to take control of your finances.  You have to hit all the metrics that make up your finances. 

          Here is a list of stocks that should be relatively safe places to keep your money while we go through the correction.  They provide diversification as well as a hedge against inflation:

BTU
XOM
KO
JNJ
GOLD
DUK