Risk Management, Stocks, and the Debt Crisis

By: Chris Ciovacco | Tue, Aug 9, 2011
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While most people understand the current global debt crisis is a serious matter, many investors may still be thinking along these lines:

  1. Companies are healthy right now.
  2. Earnings are fine.
  3. Dividend stocks do well in a bear market.
  4. My investments are not directly impacted by government debt.

While there is some truth to the statements above, it is vitally important for investors to (a) remember the domino effects that occurred in the economy and financial markets during the mortgage and housing crisis, and (b) to have a specific risk management or "stop loss" strategy in place for all their investments.

The video below draws parallels between investor psychology, the economy, and financial markets during the previous financial crisis and the current debt crisis. Like all Americans, we hope the global debt crisis can be contained by central bankers and policymakers, allowing the bull market to regain its balance. However, we must be aware of and plan for possible negative investment outcomes.

Stock Market Study - Similar Markets to 2011

 


 

Chris Ciovacco

Author: Chris Ciovacco

Chris Ciovacco
Ciovacco Capital Management

Chris Ciovacco

Chris Ciovacco is the Chief Investment Officer for Ciovacco Capital Management, LLC. More on the web at www.ciovaccocapital.com.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Investment recommendations may change and readers are urged to check with their investment counselors and tax advisors before making any investment decisions. Opinions expressed in these reports may change without prior notice. This memorandum is based on information available to the public. No representation is made that it is accurate or complete. This memorandum is not an offer to buy or sell or a solicitation of an offer to buy or sell the securities mentioned. The investments discussed or recommended in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is not necessarily a guide to future performance. The price or value of the investments to which this report relates, either directly or indirectly, may fall or rise against the interest of investors. All prices and yields contained in this report are subject to change without notice. This information is based on hypothetical assumptions and is intended for illustrative purposes only. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION CONTAINED IN THIS ARTICLE.

Ciovacco Capital Management, LLC is an independent money management firm based in Atlanta, Georgia. CCM helps individual investors and businesses, large & small; achieve improved investment results via research and globally diversified investment portfolios. Since we are a fee-based firm, our only objective is to help you protect and grow your assets. Our long-term, theme-oriented, buy-and-hold approach allows for portfolio rebalancing from time to time to adjust to new opportunities or changing market conditions.

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TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/