I am very thankful for this column. It has provided me a platform to sound off on a wide range of topics: the dollar, OPEC, drilling, interest rates, real estate, the bailout package, gold, volatility, stocks, bonds, and of course, politics.
Now that the election is over, I can focus in on the economy and the markets again. I will be forever changed in that I have found a new passion for the political process. I have been given a great opportunity to host a daily show on
called "The Strategy Room" and we throw around topics that affect everyone.
I mention "The Strategy Room" because it is intended to be a political forum. During my months as host, I have realized that the economy is front and center on the minds of just about
of the emailers to the show. They are worried about their investments, their homes and their jobs.
I am paying careful attention to regular Joe and Jane Investor. They are the ones who have trillions of dollars invested in 401(k)s and pension funds. They are the investors whose buy-and-hold strategy is bleeding them during a material downturn in the markets and the economy. My point: Whether you are a pro trader, a day trader or a guy or gal who has money in his or her retirement account, we are all in this together. The market has treated us all the same way recently -- rough! The market has taken our hard-earned money and squeezed it, shrunk it and left us scratching our heads looking for direction.
Some have been hit harder than others. But it feels bad to all of us. Just knowing that we are not alone in this downturn eases the pain, anger, embarrassment or whatever emotion we are experiencing. Seasoned veteran traders are trying to figure things out, so small investors should take heed and wait out this market turmoil.
We have a new president now. We should be good Americans and support Barack Obama whether you think he is good or bad for the markets and the economy. He is our commander-in-chief and has earned that much.
The purpose of this column is to discuss ways to protect investments in tough times and maximize profits in good times. It is clear that we are in the former. So, I have (week after week) told you to remain nimble, liquid and as free from risk as possible. That means no new substantial positions have been recommended here lately. In fact, the portfolio has been running about 5% risk and 95% Treasuries for a while. That has served us well during massive moves in the indexes, many of them down.
Time to Dip In a Little
While doing due diligence scouring stocks, investments, bonds, etc. for the big thing, I have added some positions to my portfolio. I re-entered the
SPDR Gold Trust
U.S. Oil Fund
trade. I am buying these exchange-traded funds and will add to them if the prices of gold and oil start to firm.
My thinking is that after the dust settles and the world realizes that the Democrats in the U.S. Congress, Senate, and White House will spend substantially more than promised during their campaigns, we will reflate. The beneficiaries of reflation are gold and oil as well as other physical commodities. I am steering clear of equities that produce the oil and mine the gold because I am concerned about the tax treatment they may be burdened with in a new era of Washington tax-and-spend politics.
The rest of the portfolio remains very liquid. Short-term T-Bills and cash mutual funds stay ready for implementation when the market shows signs of recovering. I am in no hurry as the inauguration on Jan. 20 needs to pass before any substantial market calls are going to materialize. Missing the bottom is OK, while buying into another meltdown defeats the purpose of investing. The best trading advice I can give you is to sit out this volatile sea change as we look for opportunity to make and/or save money. There are always pearls in a bed of oysters but now is not the time to be aggressively buying oysters (most are clams, lately).
The first column I wrote (on May 5) I was sitting on my deck at the shore. I have to note that as I write this (Sunday, Nov. 9) it is 60 degrees, sunny and I absolutely love the fact that I am writing this column from a sun-drenched deck overlooking the Atlantic Ocean. It is a beautiful day and I am taking the day to write, appreciate the view, and appreciate my family. I have the gut feeling that the market will be a traders market again, sooner or later. Right now is a time of capital preservation. There will be a time to invest more aggressively, but not yet, in my humble opinion.
Until then, trade with your head, not over it.
Know What You Own: Bolling mentions the U.S. Oil Fund ETF. Other oil companies that may be affected by oil are ConocoPhillips (COP) - Get Report, ExxonMobil (XOM) - Get Report, Chevron (CVX) - Get Report, BP (BP) - Get Report and Transocean (RIG) - Get Report.
At time of publication, Bolling was long the SPDR Gold Trust and U.S. Oil Fund exchange-traded funds, although holdings can change at any time.
Eric Bolling is a host on the new Fox Business Network. Bolling was one of the developers and original panelists (nicknamed "The Admiral") on CNBC's "Fast Money."
Bolling is an active trader specializing in commodities, resource trades and ETFs.
Bolling is a member of several exchanges including The New York Mercantile Exchange (NMX), The Intercontinental Exchange (ICE) and The Commodity Exchange of New York.
After spending 5 years on the Board of Directors at the NYMEX, he became a strategic adviser to that Board of Directors where he assisted in bringing the company (NMX) public. He has been included in Trader Monthly Top 100 in 2005 and 2006. Bolling was the recipient of the Maybach Man of the Year Award in 2007 for his contribution of philanthropy and willingness to de-mystify investing to Main Street.
Bolling graduated from Rollins College in Winter Park, Florida and was awarded a fellowship to Duke University. Bolling was an accomplished baseball player. He was drafted by the Pittsburgh Pirates where he played before his career was cut short due to injuries. He honors his baseball past by sporting the NYMEX trader badge, R.B.I.