    So what do you think of the market action lately? Lots of seesaw but I don’t think we’re finished with the all the negatives seen lately in financials.  Enjoyed watching Jonathan Hoenig this morning… the Capitalist Pig who offers insight on the daily market action. He’s generally pretty negative about current market opportunities, but has a really interesting perspective. Today he mentioned the Wall Street Journal’s article on pension funds.  Seems some of the largest pension funds in the U.S. are divesting a good percentage of U.S. held stocks and shifting overseas, some cutting domestic stock percentages from 50% to 24% while moving into the international markets.  But as Jonathan pointed out, pension funds decisions are akin to investing by committee. Just maybe this is an indication of where not to put your money right now.
    Either way, how much international exposure do you like in your portfolio? I’ve held a consistent 15% to 20% over the last few years, certainly wishing I had a larger stake in retrospect. Inflows to international stocks and mutual funds over the past year have been increasing at a record pace. So what to do now? I’m not going to chase the internation markets at this point- I still like 15% to 20%. I may miss out on some good opportunities over the next couple of years, but I like the U.S. markets. Here at home however, the news is pretty darn negative on the U.S. economy with the challenges we face with the credit crisis, housing and financial market prospects, consumer sentiment, the dollar, yada, yada, yada.   The financial news continues to show that many economists and investors are expecting the Fed to cut rates in a few weeks:
“The gloomier mood increases the likelihood that holiday sales, which account for a fifth of retailers’ yearly revenue, will be disappointing. Federal Reserve policy makers and private economists have cut growth forecasts as the housing slump enters its third year and jeopardizes consumer spending.”
“This is a strong indication that consumers are going to pull back sharply and growth is going to be very weak,” said Nigel Gault, chief U.S. economist at Global Insight Inc. in Lexington, Massachusetts. “The message to the Fed should be that they need to keep cutting rates.”
   Sounds pretty ugly doesn’t it? Even still, online shopping continues booming to new year-over-year records.  I guess the brick-and-mortar stores will have a harder time.  But personally, if the stock market presents another 5-10% pullback over the next few months I think that’s a great opportunity to really go long.  I’m sticking with it, and continuing to invest over time. Maybe I’m crazy… heck, maybe it’s almost the contrarian position to look at stocks in the U.S. markets right now?   I just think ugly markets present many opportunities for a patient investor. Even if the economy struggles along for the next year, the credit crisis will wane after we get tired of hearing about foreclosures and ARM resets. Fund managers and financial company managers are going to find ways to increase profits and improve margins. Gold will probably continue higher, and commodities are still doing well in this climate. But a year or two from now, the sentiment is going to be vastly different. I’ll even say that at some point in the next 5-7 years the U.S. dollar will come back very strong to the chagrin of many around the world.  Could be wrong, but I’m not betting against ‘ole Uncle Sam for the long term.   Over the short term? Think I’ll stick with Mizzou this Saturday against the Sooners!
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Great post.