BlackRock CIO give good reasons for Stocks!
Ten reasons to like U.S. equities: BlackRock | Business | Reuters
It is good to see the above reasons in print. I try to think contrarian when all of the world seems pessimistic. But man, the stuff you read can get to you. I think the first reason is the most important (maybe that is why it is first!):
1) Investor and consumer sentiment measures are very pessimistic, which often marks the bottom of equity market falls.
I have been thinking of writing on this topic of late for one reason. Whenever I read an online article about a company or industry that is of interest I always read through the comments, if available. I am truly amazed at the amount of whiny negativism. You get the feeling the end of life as we know it is here due to, pick your reason: Global warming, subprime mortgages, financial crisis, the FED, oil prices, food prices, corn based ethanol, George Bush, Nancy Pelosi (my favorite), the Iraq war, etc.
Early in my investing education I learned the phrase: The market climbs a wall of worry. I see plenty of “worry” around, so I am feeling pretty good about the future of my stock investments. I have always believed the market was a leading indicator, and it appears the economic slowdown/recession was discounted back in February and March and stock prices are starting to forecast a stronger future economy.
I do see a big disconnect between an economic slowdown and energy prices. I would expect that a recession would reduce the demand for energy resulting in lower prices. However, oil just seems to keep climbing. There are a couple of factors that may be in effect. First, the global economy may not slow much, keeping demand high. Second, energy supply is so tight that an economic slowdown will not reduce consumption enough to generate any surplus. I see high energy costs a reality for the near term future (several years) and well placed energy investments should reap huge rewards.
I think a lot of the financial media and the countless number of commenters have seriously bought into the gloom and doom economic scenario and their concerns will prove misplaced as stocks continue higher.
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