Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" - 27th Jun 20
Gold, Copper and Silver are Must-own Metals - 27th Jun 20
Why People Have Always Held Gold - 27th Jun 20
Crude Oil Price Meets Key Resistance - 27th Jun 20
INTEL x86 Chip Giant Stock Targets Artificial Intelligence and Quantum Computing for 2020's Growth - 25th Jun 20
Gold’s Long-term Turning Point is Here - 25th Jun 20
Hainan’s ASEAN Future and Dark Clouds Over Hong Kong - 25th Jun 20
Silver Price Trend Analysis - 24th Jun 20
A Stealth Stocks Double Dip or Bear Market Has Started - 24th Jun 20
Trillion-dollar US infrastructure plan will draw in plenty of metal - 24th Jun 20
WARNING: The U.S. Banking System ISN’T as Strong as Advertised - 24th Jun 20
All That Glitters When the World Jitters is Probably Gold - 24th Jun 20
Making Sense of Crude Oil Price Narrow Trading Range - 23rd Jun 20
Elon Musk Mocks Nikola Motors as “Dumb.” Is He Right? - 23rd Jun 20
MICROSOFT Transforming from PC Software to Cloud Services AI, Deep Learning Giant - 23rd Jun 20
Stock Market Decline Resumes - 22nd Jun 20
Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead - 22nd Jun 20
Where is the US Dollar trend headed ? - 22nd Jun 20
Most Shoppers have Stopped Following Supermarket Arrows, is Coughing the New Racism? - 22nd Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

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

© 2005-2019 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

6 Critical Money Making Rules