Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Ten Reasons to Stay Bullish On Stocks

Stock-Markets / Stocks Bull Market Nov 19, 2012 - 12:42 PM GMT

By: Investment_U

Stock-Markets

Best Financial Markets Analysis ArticleConservatives are disappointed about the outcome of the national elections. Investors are troubled about the recent volatility in the market. And just about everyone is skeptical about the outlook for the economy – and the Middle East.


But that doesn’t mean you should avoid owning shares of great companies – or move your money into low-yielding cash and bonds. There are plenty of good reasons this bull market can continue well into 2013 and beyond. Here are just 10 of them:

1.You shouldn’t fight the Fed. We can argue about the proper role of the Federal Reserve or whether we ought to even have one. But history shows it doesn’t make sense to invest counter to the Central Bank when it is in an accommodative mode. And with the Fed buying up mortgage securities and long-term bonds to keep interest rates down, this is as accommodative as it gets.
2.Short-term interest rates are zero. Hyper-low rates make it cheaper for businesses to borrow and easier for consumers to spend. They also make stocks attractive relative to cash and short-term bonds.
3.Inflation is still M.I.A. Yes, I know, prices are up if you’re pumping gas, visiting a doctor, or putting a kid through college. But have you checked the price of a computer, a cell phone, or a flat-panel TV lately? Also, the biggest purchase most consumers ever make is a house – and those prices are definitely down.
4.Housing prices have finally stabilized. There are plenty of pending foreclosures still, but take a closer look. Nationally, the average discount on a foreclosure in September was only 8% below market value, according to an analysis by Zillow. And many foreclosure sales are creating multiple bids. Clearly, housing is in a healing mode.
5.Credit card debt is at a 10-year low. Still worried about overleveraged consumers? That’s so 2008. Debit card purchases are up. Visa and MasterCard balances are down. And American Express has seen loan balances fall 73% from the peak in early 2010.
6.The energy revolution is underway. Utilities, factories and truck manufacturers are switching from oil to much cheaper natural gas. Slower growth in emerging markets is lessening the demand for crude, too. And technology-driven advances in everything from fracking to oil-sands development are also positive factors.
7.Corporate balance sheets are pristine. The federal government is spending money like a sailor with four hours of shore leave. But it’s a very different situation with U.S. corporations. They have been paying down debt and refinancing it at lower levels. Plus, they are sitting on roughly $2 trillion in cash. Uncle Sam may be going broke. But U.S. blue chips are not.
8.Corporate profits are at record levels. U.S.-based multinationals like Caterpillar, General Electric and Apple have decoupled from the sluggish U.S. economy. They are capitalizing on exciting new markets in China, India, Brazil and Russia. That won’t change anytime soon.
9.Valuations are compelling, too. Historically, the S&P 500 has sold at 16 times trailing earnings. Today it sells for roughly 12 times earnings. There is plenty of value to be found in today’s market.
10.The Santa Claus Rally and the January Effect. Yes, the trend hasn’t been so friendly since the national elections. But the correction in the Nasdaq and the near-correction in the Dow may be setting us up for what is historically the best seasonal performance for the stock market: early December to mid-January. Investors and traders often regret sitting his period out.

You may be bummed that Obama is still in the White House. But you should know that the stock market has performed as well under Democratic administrations as Republican ones. (And the Dow is up more than 75% since Obama took office.)

You may be bummed because the economy is still weak. But you should also understand that there is no short-term correlation between GDP growth and stock market performance. Perversely, stocks often rally during the bad times and sell off during the good. (The last three and a half years are a fine example of a weak economy presiding over a roaring stock market.)

In short, if you can’t be persuaded to invest in stocks during a period of zero interest rates, low inflation, record corporate profits, pristine balance sheets and cheap valuations, there’s probably not much I can say to change your mind.

Also, to be fair, there is one positive to sitting in cash during the most disrespected bull market in history and it’s this: If you reinvest those money market dividends each month, you will double your money in just 3,200 years.

Personally, I don’t like to think that long term. Plus, I plan on spending my money before then.

Good Investing,

Source : http://www.investmentu.com/2012/November/ten-reasons-to-stay-bullish-on-stocks.html

by Alexander Green , Oxford Club Investment Director Chairman, Investment

http://www.investmentu.com

Copyright © 1999 - 2012 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email: CustomerService@InvestmentU.com

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in