NEW YORK ( TheStreet) -- On
I sounded some alarm bells when I suggested investors take the positive news from Europe, improving economic data in the U.S. and strong ADP report with a grain of salt and that they should become more cautious, not more bullish.
I have to admit, it was a gutsy move with the
Dow Jones Industrial Average
up some 240 points.
However, I'd like to take Friday's unemployment data and
revenue warning reiterate my worries and my advice: For those who can, take the money and run.
Markets aren't selling off at the moment because investors believe a third round of quantitative easing is a certainty. Once again I must sound a warning -- QE3 will do very little to help stocks. Buying bonds simply does not create jobs.
Moreover, earnings estimates, as I wrote Thursday, will likely come down some 20 to 25% from current levels. Lastly, so far this century the months following an election have tended to be somewhat erratic.
I'm not a fan of market timing and don't proclaim to have a crystal ball. However, I do believe in data -- and the data, both fundamental and macro-economic, is telling me trouble lies ahead.
Avoid broad market exposure such as owning the
SPDR S&P 500
exchange-traded fund and look to rebalance your portfolio towards companies with strong balance sheets and a solid dividend yield.
Some of my favorites are
(MCD - Get Report)
(BCE - Get Report)
(SO - Get Report)
-- especially after the recent sell-off, and
Johnson & Johnson
(JNJ - Get Report)
I also think that commodities ETFs like
SPDR Gold Shares
iShares Silver Trust
will fare well. Be careful of oil though, a potential release of the strategic reserve by President Obama -- should he win -- could put a damper on prices.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.