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TIMINGTRUTH.COM NEWSLETTER 2011-08-04
NEWS: There's been a lot of noise about debt recently. In fact it's a huge problem for several countries and the global economy. The question is, What does this debt mean to an investor following the TimingTruth strategy? The simple answer is, Not much! Remember that the TimingTruth strategy is based on appropriate response to the long term trend regardless whether it's up or down. We carefully analyze those trends for change and act accordingly. It is true that debt can and will impact these trends but then so do many other factors beyond our control. If or when "debt" changes the trend then it is time to act. The links below provide a simple overview of our the TimingTruth strategy.
CURRENT SIGNAL TRENDS: Given the "Debt Crisis" the S&P is still a Hold. If you own shares keep them; if you don't then don't buy any. The trend is presently flat. The graph below shows the S&P 500 with the trend analysis lines.
OUR STRATEGY INSIGHTS: A word about personal debt. We at TimingTruth believe and practice that incurring personal or family debt is unwise. The reason is that you cannot predict the future. If you are encumbered by debt and circumstances change you're probably in trouble. Therefore we encourage individuals NOT to take on unnecessary debt. What do we mean by unnecessary? In short only buy what you need, not what you want! This understanding is largely lost in today's world of excess marketing and excess consumption, especially in countries like the US. Many people today wish they had bought the 1800 sq. ft home for $185,000 instead of losing the 2500 sq. ft. home they bought for $320,000. So, here are some simple practices. - Redefine what it is you actually NEED. Our society has warped our sense of need with inflated WANTS.
- If you cannot pay the FULL balance every month then avoid credit cards.
- If you must buy a home or car with a loan don't buy more than you need even if you qualify for more.
- Save until you can buy your "toys" with cash or better yet avoid the toys.
- Avoid student loans. Get a job instead.
We understand the arguments for "using other people's money." We simply disagree with that practice and encourage folks not to get caught in that trap.
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