This business regarding the sovereign debt problem in Greece is one gigantic pain for equity investors. It’s like a lingering threat to your pocketbook that just won’t go away. (See The Debt Crisis & the Great Euro Reckoning—What the Fallout Means to Americans.) We’re at the stage now where, in spite of the short-term hit to the stock market, we’d be better off with the certainty of a default. This persistent uncertainty is the greatest risk of all and it will continue to weigh on investor sentiment. If this issue were settled, I’d bet the S&P 500 Index would be well over 1,400.
We’re in the lull between earnings seasons and investor sentiment typically wanes a bit in the absence of corporate reporting. While I am expecting a positive year for stocks in 2012 (barring a new war with Iran or some other unexpected shock), investment risk in the stock market remains high and investors have no need to rush into any new positions. This is still a stock-picker’s market with little tailwind from the broader market.
Investor sentiment is also being pressured once again by lingering uncertainty regarding the health of U.S. banks, which continue to have big mortgage liabilities. The amount of foreclosures on U.S. homes rose again in January and, practically speaking, you can’t have a growing Main Street economy without price stability in the housing market. There is still a long way to go before the U.S. real estate market can begin a new, upward business cycle and this directly affects the health of the U.S. financial sector.
As I say, I’d be in no rush to consider new positions in the stock market at this particular point in time. Valuations are still reasonable and this is very helpful, but investor sentiment can’t get bullish until the sovereign debt crisis in Europe is properly dealt with, regardless of the consequences. As an investment strategy, I would be identifying solid, dividend paying assets on the stock market and would just wait until a price correction before buying.
I do think the stock market (S&P 500 Index) will be able to complete its right shoulder technical formation sometime this year. Price-wise, however, I feel that this would represent a topping out of the stock market, in anticipation of slower earnings growth and a possible recession in 2013. This is why I’m not particularly bullish on the stock market and why …
read more : http://www.profitconfidential.com/
- Author Articles
- More From This AuthorThe stock market is holding up well and it has performed strongly since the beginning of the year. I don’t want to rain on its parade, but I do want to mention that Street analysts have been quietly...Buying in the retail sector continues to be selective. Consumer spending continues to show some promise as evidenced by the retail sales reading in January that pointed to a 0.4% rise in total spending,...Copper prices, as well as all precious metals, have bounced strongly off the lows last year and there are many signs that this move up is only the beginning of the move that will push up mining...There are many reasons to be skeptical about this past January’s market rally. One of the most important key indicators flashing a warning sign is the fact that the stock market’s big rise in January...If the S&P 500 Index consolidates around the 1,350 level, then I think it’s fair to argue that the stock market is appropriately valued given all the information we have right now. I’m thinking that...
- Related Articles
- Related ArticlesThis technology builds on 1995 by Jeremy and JJ Allaire. The impact of ColdFusion progressed from versions 1 to 10 and has deployed best applications in the global market. The number of personal computers have...Jet-black in color, Bitumen is an oily, thick material. Also known as asphalt, it is a naturally-occurring, crude byproduct of decomposed crude materials. Bitumen is flammable. The Natural Bitumen had several...Test4actual IBM Application Developer 000-610 updated computer based training is available among even such computers which are joined through networking so you can do your updated 000-610 labs latest test with...Pass your Microsoft 70-573 book by getting knowledge from Test4actual 70-573 Microsoft MCTS updated audio exam and also practice with our Microsoft 70-573 from Test4actuals latest practice exam for more...Pass your Microsoft 70-573 book by getting knowledge from Test4actual 70-573 Microsoft MCTS updated audio exam and also practice with our Microsoft 70-573 from Test4actuals latest practice exam for more...
- Latest Articles
- Latest ArticlesAt one time or another, almost every man on the planet will need the help of a doctor for a male organ problem. A man's equipment is delicate, and it's often exposed to a significant amount of use and abuse;...Is your carpet stained? Are you currently tired of taking a look at it? Are you desperate for a carpet cleaning answer? You’re not alone; lots of people seek a carpet cleaning option. Many individuals...According to information collected by online website, the median car insurance for women is about 9% lower than the rate for men. Females drivers generally find less costly car insurance charges when...If you had quite a tough time choosing which engagement ring to give to your fiancé, don’t worry because looking for men’s wedding rings should be a lot easier. Not only do you have a wide variety of...A timber fence does not only increase the value of your property but it also gives you proper privacy as well. There are different reasons to build a fence, by this you can provide safety to your kids and pets...
