The Trader's Pendulum

J.B. Slear and his associates at Fort Wealth Trading Company, LLC are always anxious to share market trading concepts. A good one to learn about is called "The Trader's Pendulum." Here's an overview of how it works:

All healthy markets have an ebb & flow pattern to them. The same goes for the flow of money.

During the early 1990’s the flow of money was leaving stocks and entering into the commodity sector of investments.

Many people will recall that some of the grain sector's highest prices in history occurred during the last half of the 1990’s.

In 1997 the flow of money went back into the stock markets. Highlighted by the all-time-highs in the Dow Jones Industrials, the "Roaring 90's" resulted in all time highs being hit by many stock averages in the year 2000.

The stock prices were so high in fact, that George Ure has written at www.urbansurvival.com, "If the Dow were to have its same purchasing power today, as it did in the year 2000, it would have to be at nearly 14,000!"

As the “internet bubble” collapsed, other investments became vogue. The “housing bubble” encouraged excessive speculation in residential housing and stories of “house flipping” were widespread - despite predictions that things would ‘end badly’ – which we can see some evidence of today.

We believe that in 2005, commodities may have entered into a new bull market phase, especially as it relates to precious metals and grains.

The driving forces are in the headlines almost every day and are reported on leading financial web sites such as Jim Sinclair’s, www.jsmineset.com. Oil seems to be going up due to Middle East tensions. Grains are going up due to increased interest in ethanol production. And precious metals are holding their intrinsic value which means they appear to be appreciating quickly, due to the falling purchasing power in the international marketplace of the U.S. dollar.

This flow of investment capital from one class of investment to another has been described variously as "hot money", the "flow of money" or in our office simply "the trader's pendulum."

Recognizing that there is always a class of investment ascending while another peaks and then fades, Fort Wealth Trading Company LLC's aim is to provide traders with the broadest range of investment choices possible.

Whether you wish to trade commodity contracts, commodity options, or even buy physical gold or silver, Fort Wealth is only a phone call away from turning your investment decisions into well executed trades.

Investors Please note: There is a risk of loss in trading commodity futures, options and foreign exchange products. The lawyers tell us to say that much. But we'll go even better. Don't invest with money you can't afford to lose. Don't invest if a loss could force you to lose your house, not be able to afford meals, etc. Use some sense. Investing can and does involve risk. In certain positions you can lose more than your original investment. Your broker will explain this to you if you're not clear on what we're telling you here.

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