US Stock market view - January 2012

Almost 3 weeks into the new year, it’s about the time to re-examine the market.

If your return is less than 4% so far this year, you are underperforming the market.

-The bias is still a bit bullish… but may take a pause soon

-So far this year, the defensive players have been losing ground. Utility- last year’s shining star, has lost 3%. But they are not out.

-Broader market slightly outperforms DOW, up 4% vs. 3%

-International has been outperforming US, but Euro problem is not over yet. US will kick it a few more times the next few months to boost capital flow back. Expect some choppy ride.

-Silver has gained 10%, better than gold.

-Gulf tension could trigger energy sector spike. If economy turns around, energy will also be higher. So accumulating some energy during pullback is not a bad idea.

-Remember to lock reasonable profit frequently this year, especially during H1. Greedy will be your enemy. But don’t completely pull out of the market – as it may very well turn out to be a banner year for the stocks and you don’t want to watch the market soar when you have nothing in the basket.

-US economy isn’t as bad as it appears.