4 headwinds US stocks can't buck

4 headwinds US stocks can't buck



Howard Gold has written an excellent article about why the stock market has gone nowhere in the past few months, and this situation may continue for several more months at best while the worst could be a scary pullback in which you won't know where the bottom is.  One headwind Howard mentioned was the eventual rise in interest rates by the Federal Reserve.  I agree with the author that this fear is overblown, and the Fed will not destroy people's confidence in raising rates too high or too fast.  For this reason, you should temporarily hold onto your investments, especially if they are oil companies like MDR and SD, but only for a while.



We must be extra cautious because other headwinds that Howard mentioned might really cause trouble.  The strong dollar that we have will continue, and this will hurt commodity prices and earnings of big companies which do a lot of business overseas.  So, the decline in earnings and the strong dollar fears will certainly put a cap on stocks for this year.  Then, finally, there will be a big Congressional battle in October over the national budget and the debt ceiling.  This could really cause an avalanche decline.  So, we need to be prepared to sell our stocks at some point in the future while we still have a profit.