Tuesday, April 28, 2009

Tracking daily fiscal drain: April tax effect still not over

The government is still taking in more than it is spending on a daily basis due to the effect of April tax collections. This is fiscal drain or fiscal drag. It could mean the stock market is vulnerable over the next few days or weeks, however, at the rate the government is spending the fiscal drag will soon reverse to fiscal stimulus. The drag is already starting to diminish.

My recommendation is to buy stocks into any near-term dip that occurs. Like the one we are getting today!

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