Getting More Bang for Your Cash

Brainteaser

Doug Fabian, editor of Making Money Alert, has an alternative for investors too chicken to get into the market or who are just looking for a better return on their cash holdings.

Despite the recent strength in stocks—and the possibility of a continued hope rally—I think the market is still confronting a host of nasty negatives. In fact, I think the US economy still has a long way to go before it rights the ship of rampant debt creation, surging unemployment and contracting consumer spending. Then there is the real estate market, which continues its rapid deleveraging—both on the housing front, and the commercial front.

I fear that this massive debt crater our leaders are digging the country into will have significant consequences for the economy and the stock market in the years ahead. These consequences won't be positive for the bulls, and it's another reason why I advocate approaching this market with extreme caution.

I think it is very important for you to remember that our economy is still in the midst of the greatest storm since the 1930s. History shows us that troubling economic times don't follow a path straight down. As we've seen, strong bear markets are replete with so-called "fits and starts," occasions where stock prices re-test their lows before moving upward. This latest rally is one of those starts, but I suspect the market will be back to having fits sooner rather than later.

I know a lot of readers are committed to having a high cash position during this bear market. So, it's no surprise to me that lately I've received a lot of questions regarding cash alternatives. Many of you are understandably not content with the very low rate of return being paid by today's money market funds.

And while I feel that the money market is the safest, most liquid place to park your serious money during this time of market flux, I do think there are several safe alternatives to your run-of-the-mill money market fund.

One of my favorite money market alternatives is the iShares Barclays 1-3 Year Treasury Bond (NYSEArca: SHY). This investment seeks results that correspond generally to the price and yield performance of the short-term sector of the US Treasury market as defined by the Barclays Capital 1-3 Year US Treasury index.

This short-term Treasury bond fund is a good place to park cash. In fact, we have a 25% allocation to this fund. This fund has served us well during the past year, and I suspect it will continue doing so in the year ahead.

The current yield on SHY is 2.05%, so if you are looking for a good place to get a little more yield than your money market account, check out SHY. (It closed below $84 Friday—Editor.)

Brainteaser

Two Energy Stocks the Big Money Likes

Peter Way,
editor of Block Traders' Oil and Gold Monitor, says market makers are looking for higher energy prices, and they like two stocks in particular.
In today's green-dominant "environment," there are still folks looking for crude oil prices to get below $30. We wish them luck, and encourage them to be more aggressive in their sale of energy stocks at lower prices (for us to buy).

Now, in the midst of the monthly "roll" of positions in crude oil futures, June is becoming the front month as the April [futures] officially expired. The final liquidations of those contracts not destined to be filled by actual delivery of product typically provide a brief apparent market price weakness.
Quotes for [the June 2009] contract might even get back to the $50 level, from their $52+ [recent] settlement. June and December crude contracts are important, because their open interests reflect the energy industry's use as a delivery option, rather than simply an insurance or speculative mechanism. Interim months tend to have a larger influence from non-industry onlookers more interested in bucks than in BTUs.
The July to November contracts continue to reflect the purchase of protections against prices perhaps above $80 a barrel. More telling, the energy industry-dominated Decembers provide for the possibility of as much as $74, and no less than $56.
What everyone else can see is a continuation of monthly settlement prices in a curve rising by another $20 out to December11th. That's an annual rate of increase of 14% from the current $50 settlement. Active players in the market apparently see lots of encouragement to believe in the possibility of much higher prices.
So, what we have is a constructive, but not exciting, set of surroundings for energy stocks. Implicit in that picture is a resumption of world-wide energy demands and therefore of economic recovery.
But, to make money today we need to get a lot more specific about opportunities.
Continental Resources
(NYSE:
CLR) qualifies importantly because of its operating leverage in terms of production potentials or resources per share of stock. At the 2008 crude oil price peak, the stock was more than three times its present $24 price. The shares apparently are enjoying institutional enthusiasm over its potentials in the Bakken oil shale holdings. It ranks above 97% of the other 2,000+ equities on our reward-risk scale.
Southwestern Energy
(NYSE:
SWN) has demonstrated that volume market-makers know the behavior of its investment followers well. The stock has a long history of meeting its sell targets, with exceptional annual rates of return. Here it ranks better than 95% of our covered stock population. A 9.5% upside target should be achievable as the year progresses. (It closed just below $24.50 Friday-Editor)

菜鸟

bigbadwolf

多谢。

winwise

这Doug Fabian，的iShares Barclays 1-3 Year Treasury Bond (NYSEArca: SHY). 在半年多前真好用

BSC

thanks

seafood

coexist

thanks