Equity markets on the rise until...
There is no reason NOW not to have some percentage on one's assets invested in the U.S. equity markets. Fixed income pays nothing and bank accounts are just for liquidity and a safe night's sleep. Equities representing companies with sound balance sheets and especially those that pay dividends are simply essential.
It is sad that the Great Recession drove so many from the market that they have never recovered. It is sad that the recent spate of news about robo-trading activities and hedge fund excesses have made it seem like the individual investor has no chance. Now that the dollar and the U.S. economy, with all its uncertainties considered, is becoming a haven again, the equity markets have some up and down momentum, jagged but ultimately up, and maybe up and up.
The question becomes when will the tide turn. Is it psychology or fact based. Despite all of the statistics that show U.S. stocks as generally fairly valued or undervalued, nothing can contain an onslaught of negative news or thought. A loss of confidence in financial markets once again, if it happens, does not have any valuation parameters. That's what everyone learned in late 2008, and that is a plausible possibility, if not imminent.
No advice here except stay the course and stay alert. There will be a reversal in the equity market at some point in the future that will be shocking even if not long term. We live day to day. Equities are a must unless one has a big mattress.
It is sad that the Great Recession drove so many from the market that they have never recovered. It is sad that the recent spate of news about robo-trading activities and hedge fund excesses have made it seem like the individual investor has no chance. Now that the dollar and the U.S. economy, with all its uncertainties considered, is becoming a haven again, the equity markets have some up and down momentum, jagged but ultimately up, and maybe up and up.
The question becomes when will the tide turn. Is it psychology or fact based. Despite all of the statistics that show U.S. stocks as generally fairly valued or undervalued, nothing can contain an onslaught of negative news or thought. A loss of confidence in financial markets once again, if it happens, does not have any valuation parameters. That's what everyone learned in late 2008, and that is a plausible possibility, if not imminent.
No advice here except stay the course and stay alert. There will be a reversal in the equity market at some point in the future that will be shocking even if not long term. We live day to day. Equities are a must unless one has a big mattress.
posted by John Borden at 3:12 AM
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