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Opening Statement from the November 2014 issue of Dividend Gems

First published on November 17, 2014 for subscribers to Dividend Gems

Over the past several months economic headwinds from around the world have materialized largely as we anticipated. From our perspective there have been very few if any surprises to speak of. Accordingly, the capital markets have generally behaved in a fairly predictable manner.

Even in circumstances when the capital markets have responded irrationally, most of these responses were largely predictable. Thus, we feel it has been an easy road to profits over the past few years.

Looking past all of the details, we have kept our research customers in the US equities market close to 100% of the time over the past several years. This remains as the most important result because the stock market has soared over the past several years.

In addition we have accurately forecast every market selloff since 2009. Indeed this is a rare circumstance and one to treasure, as the capital markets are almost invariably fraught with uncertainty even for the most competent investment strategists, analysts and fund managers.

Our economic forecasts have also been quite accurate. For instance, we detected the causes of what would later materialize as deflationary forces in Europe. In response, we recommended near-0 interest rates in the EU several years ago as a way for this region to mitigate the impact of deflation. Finally, we predicted Europe would initiate quantitative easing due to its previous failure to acknowledge gradually mounting deflationary forces.

Our Latin American research has also yielded excellent results. For instance, we forecast the economic problems in Brazil from the onset a little over three years ago, all while having predicted many of the nation’s interest rate changes. More important, we have provided accurate trading guidance for the Brazilian iShares market ETF, EWZ. In fact, more than three years ago when EWZ was in the high-70s/low-80s, we stated that we expected EWZ to bottom in the high to mid-30s once Brazil’s economy showed the full symptoms of weakening.

We have also been ahead of the curve on India. We identified issues in India several years ago and pointed to a bearish stance for the Indian market ETF, IFN.

In contrast, one year ago we stated that India was the best positioned of the three emerging markets we cover. IFN has significantly outperformed the other emerging market ETFs over that time frame.

We have also discussed numerous risks in China’s economy, all while making sure not to allow these risks to spook us out of the US stock market. We remain on the lookout for issues from China.

We have also remained ahead of the curve regarding the US economy and capital markets. In short, we have consistently deciphered key economic and earnings data in a manner that has led to profitable investment strategies. Most important, we have navigated the US stock market with near perfection ever since the launch of this publication.

Over and over again we have led the way when forecasting accurate data from the US, EU, China, India and Brazil, while the IMF and Wall Street firms have only matched our forecasts several months later once the opportunities faded.

Finally, we have accurately forecast the commodities, currencies and precious metals markets ever since adding these assets to our research publications.

As we expected would be the case, over the past several months the US equities markets bottomed right where we forecast and have continued to make new highs. Regardless, investor trepidation continues to mount as many are just now beginning to realize that Europe will have no recovery anytime soon. We continue to see further weakening seen in Europe, Latin America, South Africa, Russia, Australia, Canada, many parts of Asia including the Japan which is now officially in a recession.

The UK is showing some modest signs of weakness but the economy remains strong on paper. We do feel there is a good chance that the UK will weaken considerably in 2015. In contrast, the US continues to show modest signs of improvement although it has done nothing to address its structural problems. Unfortunately Europe has made very little progress towards resolving its more problematic structural issues.

South America also continues to weaken as we expected. We feel the region will generally continue to worsen through at least the first half of 2015. Finally, we remain focused on China as the primary risk to the global economy.

Although we place the odds of the EU entering a recession in 2015 at