August 9, 2010

As the members of the Gary Goldberg Financial Services wrote in the beginning of the month, we expected earnings to drive the markets significantly higher. This week, the last third or so of the S&P's companies will be reporting earnings. Furthermore, some key international companies will be reporting earnings overseas as well. As we have previously discussed, once earnings season passes, and the markets will have to focus on the underlying strength of the economy, we believe there will be a slight sell off, followed with a tight range bound trading pattern through the mid-term elections. Subsequently, we believe there is a decent probability of a market rally at the end of the year. "Do-it-yourself" investors need to be very cautious here and may want to consider to reduce their index market exposure (Vanguard S&P500 Fund, I-Share Russell 2000 ETF, etc....) as these broad market indeces are likely to represent all of the risk of the market, while lacking the benefits of fundamental and tactical analysis that mutual fund managers employ, and which we believe are particularly important in this type of environment, to avoid excess market risk.