Today's Fear is Likely Tomorrow's Reward Discussed by Matt Golab

ELK GROVE, Calif. - Dec. 23, 2014 - PRLog -- A perfect indicator has been the massive increase in long-dated government bonds pushing the highs we saw in October when the market hit it's correction low. However, fear seems to be pushing investors into these conservative investments despite stocks being far from their October lows.

Because stocks are not near their October lows and bonds are gaining so much interest, this might be more of a response to headlines and individual investor assumption rather than a total market collapse. I believe the market has room to grow through the end of the year but I have also been speaking to the recent swings in the market because for most of the year we have been able to get away with very little volatility.

In most Decembers when the market has these flip flops it usually recovers very well. Despite previous markets not being any indicator of what will happen next, my personal bias is that the market will rally to maintain strong returns for the year. I also would like to give context for what we are seeing the last few weeks as we approach the end of the year.

There are two major issues affecting the market right now, the first is oil and the second is the dumping of high yield bonds and the two are slightly connected. Oil prices more than likely will not stay this low for an extended period of time but may remain low due to hedge funds taking advantage of opportunity and shorting oil to make up for poor annual performance. Because of this type of market manipulation and how quickly markets change it is even more important to have an over-informed investment team that is able to respond to these changing issues. This type of market manipulation opens the door for increased volatility in short bursts which we have seen a few times in the last couple of months.

This is where Quantitative Easing comes into play. Without the constant flow of liquidity into the market 2015 will more than likely bring increased volatility and swings in the market. This does not mean that return won't be there for the patient investor it just means that a strong stomach and expert team will be more and more valuable. Proactive not reactive strategies will be needed to minimize risk and pick up positions at discount along the way in order to provide attractive annual returns.

Along this line it's interesting to point out where the U. S. fits in the global scheme of things. Around the world there are economies in collapse and struggling to pay bills but also in each of these regions there are pockets of the extremely wealthy. The individuals often do not invest in their own country because of all the risks associated with where they live which leads them to invest elsewhere. Russia is a great example, the number wealthy Russians investing in the United States is skyrocketing, from buying businesses to investing real estate.

Despite how inundated we are with the idea of the dollar collapsing, having to owe China everything and the kitchen sink, investors around the world still look at the United States as a sound place to invest. Especially with the dollar hitting all time highs against the Ruble the amount of cash flowing out of Russia into the U.S. is on pace to pass $120 Billion.

I want to touch on for a moment about the dollar and it's impact on investing decisions. The stronger dollar does reduce domestic inflation, because so much of what fills our shelves comes from outside the U.S. a stronger dollar reduces import prices. Reduced import prices can help businesses and companies increase their profits and we have all seen the massive impact on our gas tanks. In fact the consumer price index fall in November in part to gas prices and hit it's largest drop since December 2008. And core inflation, the real one with food and energy dropped to 1.7% in November.

This door swings both ways though, companies that export could lose market share because what they are selling is more expensive and this has an impact on U.S. GDP. Now how does this affect our investing decisions? With about 45% of the revenue for S&P 500 companies coming from outside the U.S. the impact of a strong dollar might have an impact on index performance which we might not see for an earnings cycle or two.

Matt Golab was recruited to write a chapter in Tom Hopkins recent book, Victory which became a National Best Seller. Matt also received the Editors Choice Award for his contribution to Victory, not every contributor is selected for this high honor.

Matt is an authority on creating innovative tax and investment solutions to help his clients succeed in their retirement years.  The strategies Matt Golab has established and passed on through successful financial planning with hundreds of clients over the years has launched him into the national spotlight.

He is often featured in Retirement Advisor Magazine, a publication which attracts the top financial planners in the country. Matt has been featured in newspapers around the country passing on the principals for a successful retirement. Golab is often asked by national websites that focus on the education of consumers to present his knowledge on the areas of retirement and retirement income plans.

Matt is frequently featured in The Wall Street Journal, CNBC, MSN Money, The San Francisco Chronicle, Newsweek, TheSmartRetiree, Burlington County Times and appeared nationwide on ABC, CBS, Fox, and NBC as well as USA Today.

Matt has a weekly radio show where he discusses all aspects of retirement planning, total wealth management, and estate strategies. Through his relationship with Retirement Radio Network experts such as David Walker former Comptroller General of the United States, Harry Dent of the H.S. Dent Foundation, John Bogle of the Vanguard Funds and many more have been heard on his show Income Forever.

Golab is the Author of The Consumer's Guide to Planning Your Retirement: Your Guide to Mental Peace and Financial Well Being. Matt Golab continues to expand the geographic reach of his audience and desires to bring his expertise to a nationwide television audience. Matt emphatically states his mission, “I want to change the way Americans view their retirement. They can succeed (stay retired) regardless of what happens in the market".

Contact information for Matt is available at his website, http://www.aaronmatthewsfinancial.com/

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