If you focus on crisis as your primary investment strategy for 2014, I think you will be very unhappy with your results by this time next year.
That’s because I expect 2014 to be very good for investors who own stocks that can profit from a gradual but steady world economic recovery.
With the risk removed for another U.S. government shutdown or debt default, we can easily see Dow 17,000 and S&P 500 at 2,000 in 2014.
Unemployment in the United States is now at a five-year low near 7%. Average weekly earnings — cash earnings excluding benefits — increased 0.2% in November. That is up 2% from a year ago.
Meanwhile, the U.S. economy is giving us plenty of reasons to be optimistic. It shows signs of life, growing at 3.2% this last quarter and now growing at an annual rate of 2.2%.
While this is modest growth, it is still VERY likely to drive the unemployment rate below 7% by mid-2014 and under 6.7% by the end of the third quarter as we head into the November elections.
As we head into 2014, I’m very bullish on oil, natural gas and gold. I firmly believe we are on the threshold of a new breakthrough technology era that will create trillions of dollars in new economic growth.
The growth will catch most financial analysts by surprise. That’s because …
Time’s almost up …
Time’s almost up to grab your pass to ALL of James DiGeorgia’s trading and investing services …
PLUS we’re ready to hand you a "check" worth $10,729 … but only until 11:59 p.m. tonight! Hurry before this offer disappears forever!
Most are focused on the relatively modest growth we see right now. They don’t account for the stimulative effect of accelerating technology.
They will see it eventually, but by then I hope to help you get positioned you ahead of the crowd.
The End of the Taper Debate Also Good for Stocks
The Federal Open Market Committee is also encouraged by the newest economic activity — enough to reduce its bond purchases by $5 billion a month and mortgage-backed security purchases by another $5 billion, starting in January.
Tapering is not likely to have an adverse effect on the U.S. or world equities. The Fed’s continuing low interest rate policy will remain in effect through 2015.
As the economy heals, the QE program will end. And now, with the doubt about "taper/no taper" out of the markets, we can move on to more-important issues like earnings and where we are in the business cycle.
Don’t get me wrong, though. After what was truly a record-breaking year in so many ways, we can expect to face plenty of challenges in 2014 as both a direct and indirect result.
What I’m suggesting is that the smartest investors will conserve their energy for what they can control, which is when and how to react. And my fellow Uncommon Wisdom Daily editors and I pledge to help you be prepared so that when the time comes to make a move, you can do so quickly and with full confidence.
One Risk Worth Watching
(But Just That, Right Now)
The biggest risk for the financial and energy markets in 2014 is a military conflict triggered by an Israeli strike on Iranian nuclear and ICBM sites.
Israel has plenty of experience at destroying targets by aerial bombing, submarine-launched missiles, computer hacking and even covert guerilla operatives. But hitting targets in Gaza, Sinai, Lebanon and Syria is much easier than hitting targets in Iran.
Even a modestly effective Israeli attack would require several well-coordinated strikes and certainly result in a substantial counterattack.
Iran is not Syria or Iraq. It has substantial weaponry. A conflict might be short-lived but would still hit the financial markets hard. Oil prices would skyrocket and gold could jump sharply to $1,400 to $1,500. A wider regional war would have greater and longer-lasting consequences.
I personally favor giving negotiation a chance. However, I am not convinced President Obama’s attempt to negotiate with this violent, repressive regime will go anywhere. From what I have seen and heard, the president has doubts also.
He recently acknowledged during an interview at the Brookings Institution that he gives the chances of a larger deal with Iran no better than 50/50 odds of success.
Meanwhile, the president of Iran says Iran has the right to enrich plutonium and will continue building centrifuges.
Here’s the risk: The world’s financial and energy markets clearly believe a deal is certain. If they do not reach agreement and the anti-Israel rhetoric returns, I think Brent crude oil will climb back over $120 a barrel … and take WTI crude right up with it.
In worst-case military confrontation scenario, we’ll see oil jump above $150. If the conflict grows into a regional war, as much as $250 a barrel could become a nasty reality until the shooting ends. (Watch this video for more information about rising oil prices.)
Whatever happens — in this or any situation — you have my word that I’ll show you how to preserve your wealth and get positioned to add to it in the right names, at the right time, with the best strategies I can find.
A Toast … to You
Looking back at 2013, in July I joined Uncommon Wisdom Daily as your Tuesday-morning columnist and as the editor of Junior Resource Millionaire and Global Resource Hunter. I want to thank everyone for being so gracious and open to my analysis.
Something I always tell my subscribers is that I’m keeping a close eye on their chickens. And I extend the same promise to you.
Stay tuned to your weekly issues, and we’ll look toward having a healthier, wealthier and wiser year ahead together!
Watching Your Chickens,
P.S. My favorite energy stocks have healthy 25%-45% upside potential even without conflict or crisis. If trouble develops, the gains could be more like 45% or up to 70%! Don’t miss a single profit play in 2014. Click here before 11:59 p.m. tonight to get on the list to receive them all!