There Ain’t No Cure for the Summertime Blues

by Marc Bastow | June 4, 2012 7:45 am

There Ain’t No Cure for the Summertime Blues

May is out (thankfully) and summer is in, and living will be … well, uneasy — particularly if you are trying to decide whether to hang with existing stocks, invest in new ones or make a play in some other marketplace.

Usually the markets give you a sign about which way to act. So what hand are we being shown today?

On the stock market side, losses and cratered business models like Research in Motion (NASDAQ:RIMM) and Green Mountain (NASDAQ:GMCR[1]) suggest that it’s time to move on, while screaming buys like Apple (NASDAQ:AAPL[2]) look attractive at now-reduced prices. After almost two weeks of bleeding, even Facebook (NASDAQ:FB[3]) is starting to look attractive!

But are we looking at a bottom for bargain hunting, or a bottom for selling? A case can be made for either side of that coin.

The stock market really seems like it’s saying “do no harm” — which means hang on for dear life, and try not to think about it on a short-term basis.

What about bonds?

Yields on the 10-year Treasury hit a historically low yield of 1.625% earlier this week, then ducked even lower on Friday as investors fled — you guessed it — stocks for the “safety” of U.S. government-backed paper.

Of course, that paper is backed by recent disappointing news on the economic front, and that’s before the summer doldrums kick into high gear, so there appears to be no evident relief or upside on this front, either. Ugh!

How about straight cash?

Everybody sleeps better when they have money stashed away under the mattress for the summer’s hot but rainy days. Why not just keep it there?

Well, money funds and bank CDs pay out … not a lot. If you socked away 10 grand for a month, you’d be lucky to get enough interest to buy a Samuel Adams Summer Ale. A six-pack is out of the question — even with the effects of compounding.

Since nobody wants into the market — and sticking money into a bank that might just use your hard-earned cash to bet on obscure arbitrage or “hedging” products, like JPMorgan (NYSE:JPM[4]) just did, is anathema to many — how about another summer option?

Take a trip.

Europe is sounding swell, as the dollar gains strength against the euro every week, so you can buy more goods with fewer dollars. Of course, there might not be a euro by the time you get there, and whatever the dollar is pegged to in, say, October, might fall through the floor.

Try to ignore the reality that the eurozone is under pressure as Italy and France struggle, Spain wavers, and Greece looks ready to fall into the Aegean.

OK, maybe a little turmoil is too much for any nervous travelers out there, so give it some thought before you head across the pond.

Here’s a better idea: See the USA or some part of your neck of the woods.

Now is a great time to load the family up into the sedan, since Ford (NYSE:F[5]) and GM (NYSE:GM[6]) are out there making deals, and gas prices haven’t been this low in quite some time. Exxon Mobil (NYSE:XOM[7]) and Chevron (NYSE:CVX[8]) will be happy to take your money, even at a “reduced” price of well under $4 per gallon, anyway.

Me?

I’m going to find my easy chair, slide it under a shady tree, spend a few minutes on the iPad to look over some magazines, turn off my phone and take a nap that ends on Labor Day.

Things have to be better by then.

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long AAPL and XOM.

Endnotes:
  1. GMCR: http://studio-5.financialcontent.com/investplace/quote?Symbol=GMCR
  2. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  3. FB: http://studio-5.financialcontent.com/investplace/quote?Symbol=FB
  4. JPM: http://studio-5.financialcontent.com/investplace/quote?Symbol=JPM
  5. F: http://studio-5.financialcontent.com/investplace/quote?Symbol=F
  6. GM: http://studio-5.financialcontent.com/investplace/quote?Symbol=GM
  7. XOM: http://studio-5.financialcontent.com/investplace/quote?Symbol=XOM
  8. CVX: http://studio-5.financialcontent.com/investplace/quote?Symbol=CVX

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