If you’ve been reading my blog for the past 2 years you’ve been hearing me talk about the slow disaster that is Europe and our municipal governments.
We’re now seeing the worst falls in Municipals since Lehman’s collapse back in September 2008. Ouch! I also say that the worst is before us, not behind.
To do: Watch your municipal holdings and know what your exposure is!
Ireland has a bailout (thank you EU and IMF) and now the yields for Portugal, Spain, and Italy are going through the roof.
This does NOT bode well for the rest of the PIIGS, Europe, and the Euro.
To do: What’s your exposure to what I think is the next big collapse?
I’ve been warning about the municipal bond market for some time now.
I think the problems are starting to hit and 2011 will be a big year of reckoning.
Look at the chart to the right. Ugly.
Why is this happening?
There’s the looming end of the Build America Bonds program, questions about how state and local governments will manage their debts, and the impact of huge pension and health care obligations that seem unsustainable.
We’re 1/3 done with the quarter, elections were yesterday, and lots left in the year.
In this week’s video, I give a little update on the quarter and year so far, plus a discussion about why you have to take the comparison of your portfolio to an unmanaged index with a grain of salt.
This week is the 3rd Quarter 2010 review and 4th Quarter preview.
If you go back and rewatch my July video (July Video) I stated I thought the 3rd quarter would be up and it definitely was.
Dow Jones + 10.27% for the 3rd Quarter and S&P + 10.72%. Of course, these are unmanaged indexes.
The markets were way down at the end of the last quarter, so this brings the indexes positive for the year +3.5% for the Dow and +2.3% for the S&P 500.
4th quarter? I think things will continue to be up, but the important thing is to ensure you have the right allocation to equities in case I’m wrong. I think the year will end positive for the equity markets.
Listen to my 4th quarter preview video for more analysis and 4th quarter action items.
