MONEY MATTERS

With last weeks performance, the Dow now is still down for the year.

The concerns that I have been voicing over the last several weeks regarding
the fact that most stocks on the stock market are down, and many are in bear
market territory, the fact that year on year corporate profits look awful, that
consumer confidence is declining, and a variety of other data that I have
outlined for you, are starting to have their effect on some of the worlds largest
money managers. (Whew! That was a long sentence.)

Goldman Sachs says the market will run into problems in 2016 caused by
rising interest rates, a strengthening dollar, and stalled profitability. One major
concern is the price of stocks, which Goldman says are high by historical
standards. Only 6% of the time during the last 40 years has the median stock
traded at a P/E multiple higher than it does today, wrote Goldmans analysts.

Jeremy Grantham, who has had a remarkable record of predicting bubbles

over the last 45 years, is already on record predicting the market bubble will
burst, as bubbles always do, and will revert to its trend value, around half of its
peak or worse. If his prediction is right, he is expecting the Dow to be down to
9000 next year.
Some of the worlds top hedge fund managers are getting large percentages
of their holdings out of the stock market as well. As a group, these large
money managers have reduced their stock market exposure by $200 billion
since September, according to data compiled by Bloomberg based on hedge
fund filings.

It appears that the financial community is starting to come around to my way

of thinking. While they are not getting out of the stock market completely, as
we did, many of them have reduced their stock market exposure by close to
40%.
What do you think? Do you think its possible that we could be on the edge of
the precipice right now? Do you think another bear market is coming?

If so and you are still in this market, I believe you are in great danger of
losing large amounts of your net worth. Please do not leave your
financial security at risk. If this turns out to be the bear market that I
think it is, we could see the market drop very quickly.

In November 2007, I warned that a major bear market was coming, and I see
the same signs today. The difference now is that we could see countries going
bankrupt this time and not just big banks.

Our strategy triggered a sell signal in late August, and despite the rally that we
have seen, I firmly believe that we are in a bear market and dont know it yet.

The 2008 bear market wiped out 12 years of gains in just 17 months. I do not
want to see that happen to anybody. It is why I write this email, it is why our
advisory firm exists, it is why I do my radio show and why we have our
seminars. I want to help as many people as possible have peace of mind.

Consumer confidence unexpectedly declined in November to the lowest point

in a year according to the Conference Boards index. The November gauge
was weaker than the lowest forecast in a Bloomberg survey of economists.
This seems to be a trend where the numbers that are coming in our weaker
than even the most pessimistic economist.

As the global economy is slowing down, we are seeing that commodities are
losing their value. Historically, declining commodity values have also been a
precursor for a market decline.

The big gorilla in the room, of course, is China. As I reported to you last week,
their economy has slowed more than expected for 13 months in a row now. I
believe that growth in the Chinese economy is actually much lower than the
government is telling us.

The Shanghai Composite closed down 5.5 percent in one day last week! This
was at the worst day since the turmoil in August. News that regulators have
launched probes into several brokerage firms and Chinese industrial
companies' profits fell 4.6 percent in October are the apparent culprits.
It is important that I also tell you that the market sometimes wants to go
up in the face of overwhelmingly bad economic data.

The market can behave irrationally as we saw in 1998 through 2000 when the
market went up on the backs of companies that had no business plan, no
money, no customers, but had a dot com after their name. If you had shook
your head and said, this is ridiculous I dont want to play you would have
missed out on 2 of the best years in decades.

Our strategy is one of watching the trend of the market, and if it insists on
going up, we want to participate. Therefore, it is possible that we could hit our
buy trigger in the next few days or weeks. When we do, we will buy. Simple as
that.

The important thing is having the right strategy when the time comes to buy.
Thats why I offer you the free consultation and portfolio review with one of our
advisors so that you can come in and visit with us and prepare yourself for
that eventuality.

When people ask me what do you do for a living? I say, we sell peace of
mind. Our product is peace of mind. If our clients can feel peace of mind
during times of great market adversity like we have had over the last month,
then we have delivered our product.

There is nothing more important to us than that. It is our singular goal to keep
our clients from becoming poor. Preserving the wealth that they have built is
job number one for us.
I believe that avoiding large losses is the single most important thing that we
should be concerned about as investors.

Perhaps you were given a package by your employer. Perhaps you sold an
asset and want to know how to properly invest the proceeds. Perhaps you
inherited money and want to keep it safe and grow it if you can. Perhaps you
just want a second opinion. These are all reasons for you to take advantage of

all of the resources that we at Money Matters have to offer you.

We want to help you to achieve your financial goals.

Thank you for subscribing to this newsletter. I hope it finds you and yours in
good health and spirits.
Cheers!

Ken