Financial Fitness & Life Planning

The stock market has finally lost its complacency as it faltered all month long, and then took a more serious turn down on Friday June 1 after the jobs report indicated that the US economy is now slipping into recession. So far this year, the market has been faked out by an economy that appeared stronger than it actually was. A brief burst of pent up demand created the appearance of a healthy recovery, but global credit strains were causing leading indicators to point negatively. Now the European debt crisis is becoming truly dangerous and hitting the boiling point, and the global economy is caught in the storm. With valuations still extremely elevated based on normalized earnings and earnings expectations now quickly deflating, I believe that the stock market is still in the very early stages of a potential freefall. 
 
As for precious metals, after a brutal bludgeoning during the first half of the month, midway through May gold and the mining stocks in particular bottomed. They have been rallying ever since and this continued in full force on Friday June 1. Since these commentaries are becoming repetitive in terms of why I believe gold is an essential component to an investment portfolio, I simply want to quote Federal Reserve Chairman Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost…”