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Kennys Blog, Stock Market Trading
December 23, 2010

December 2010

Stock Market Trading

Traders Day Trading & Kenny's Elliott Waves Blog

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New Report: It's Dangerous to Diversify - Find Out Why

A free report from Elliott Wave International reveals the risks
of portfolio diversification.  By Elliott Wave International

Welcome to Stock Market Trading the new look newsletter for 2011 from Traders Day Trading & Kenny's Elliott Waves Blog.  

Look out for it in your mailbox through 2011 with new features and analysis.

We would like to take this opportunity to wish you a Happy Christmas and a Prosperous New Year.

Wishing You


Merry Christmas

From Kenny
Kenny's Elliott Waves Blog
Traders Day

New Report: It's Dangerous to Diversify - Find Out Why

A free report from Elliott Wave International reveals the risks
of portfolio diversification.  By Elliott Wave International

Free Report: Death to Diversification -- What it Means for Your Investment Strategy | Our friends at Elliott Wave International, the world's largest market forecasting firm, have just released a new report about the little-known dangers of diversification strategy. Continue reading to learn more, or. follow this link to download the free report now.

Despite near-unanimous endorsement among mainstream advisors, the strategy of portfolio diversification has a huge, glaring flaw: Namely, when large sums of liquidity begin to flow into global investment markets, formerly disparate trends become strongly correlated. And markets that go up together ultimately go down together; in turn, the value of diversified portfolios goes down with them.

For years now, Wall Street has tap-danced around the liquidity risk. Here's how former Citigroup CEO Charles Prince described it in July 2007:

"When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance."

Three months later, Prince announced that Citigroup's quarterly earnings would be down 60%. Within the year, Prince had danced himself out of a job. Diversified investors around the world were feeling the liquidity crunch.

But after many miserable months for stock and commodity investors, the markets rebounded together -- almost in lock-step. Commodities lifted off in late 2008, and stocks followed in March 2009. Everything that declined together was going up together, and market watchers began to take notice.

"Liquidity with respect to stocks has become indiscriminate," reported a widely respected market technician. "When money's flowing in, they all go up. When money's flowing out, they all go down."

Mainstream investors finally began to recognize the phenomenon Elliott Wave International's Robert Prechter warned about in his 2002 best-seller, Conquer the Crash.

Turns out, now almost 10 years after Prechter coined the phenomenon "All The Same Markets," the correlation is still positive. Unfortunately for millions of diversified investors, the outlook is not.

According to a new report authored by Prechter and his EWI colleagues, the second round of liquidity crisis is fast approaching and perhaps has already begun. If you invest your money in a diversified portfolio, it's time you read this incredible new report now.

New Report: It's Dangerous to Diversify - Find Out Why

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