Learn the secret of how to make money while those around you are fearful, in under 2 minutes. Explanation in the text below, as well as advice on how to react to recent stock market moves.
How to keep your head when those around you are losing theirs.
Firstly get better informed by asking 3 simple questions: What’s really going on? Why is it happening? What could happen next?
Then work out how it could affect you with another 3 simple questions.
The recent turmoil in the financial markets is a great example. Investors seemed to be losing their heads. (more…)
‘Grand’ gestures with minimal effects, Europe is doing the ‘Ice Bucket Challenge’ with a glass of water. Measures won’t measure up to much. Little movement in interest rates, not enough assets to buy and ultimately – you can put out as many cream cakes as you’d like, but if people aren’t hungry, they aren’t going to eat. The pressure is rising and more is needed. Europe has become a ‘binary trade’, and it is important to invest in those set to benefit regardless.
(Click on the image below for a quick video clip summary)
Vitally important for being a successful investor is the ability to look beyond ‘buzzwords’, acknowledge that a wobble can be more dangerous when the training wheels come off and understand the nature of those that hold the future of the company / country / financial market in their hands.
From a dog to a darling, Japanese stocks have finally found favour. After returning 52% for investors last year, there are still 5 reasons this market has further to go, with opportunities most have missed. There is the potential for a catch up within the stock market, mispricing, earning growth, restructuring and increased buying. Sectors to benefit from reflation and growing domestic demand within a still unloved part of the market may profit.
[Click image below or this LINK to watch this as a TV Clip]
The room’s getting crowded, the party’s been going on a while but more people could arrive. Just beware fair weather friends and a sign it could be time to think about leaving…
Investors are expecting an eventual reduction of support by the Fed, and Merkel winning the election this weekend. However, what stock markets have not priced in is the resurgence of Eurozone troubles into the headlines. So what are the options, why is this important and how will this effect markets?
[Click image below or this LINK to watch this as a TV Clip]
Gemma Godfrey highlights the factors that could cause a pullback in markets and provide buying opportunities, on CNBC’s Fast Money. Published on cnbc.com by Bruno J. Navarro.
“Disappointing growth in Germany, the potential for political deadlock in Italy and corruption allegations in Spain appears to be increasing risk.
Market elation has been a little bit too early, moved a little bit too far, and there are these potholes that actually could cause markets to stumble, at least in the shorter term. Markets do not like uncertainty, and the longer this continues, the longer the uncertainty is over the markets, the more likely is it will have a pullback.
The U.S. stock market is approaching 500 days since a 10 percent-plus correction, which she said was the tenth-longest time in history that such a bull run has occurred.
And it means when we’re looking at where valuations are , they’re no longer cheap with respect to the U.S. market, growth isn’t coming through as we thought it was going to come through, and you’ve got this level of uncertainty, meaning that it is more likely that these momentum followers – for example, the hedge funds are buying into financials – that they’re going to start to stumble.
But I do think that that means if we do see a correction, it could be muted because it’ll be a fantastic buying opportunity for those investors that are looking to rotate back into risk assets because over long-term, we’re actually more bullish about equities.
Low interest rates, credit spreads at multiyear lows and the prospects of a return to growth could still bode well for equities.
What the market needed was confidence and the return of depositors to put their money into European banks, something that hasn’t happened sufficiently.
All of that gives us slight cause for concern, meaning that we’re growing more cautious shorter-term, although, obviously, more bullish longer-term.”
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And just a reminder of why Spain has been able to withstand bailout pressure and markets have shrugged off European woes until recently…
Gemma Godfrey, head of investment strategy for wealth management firm Brooks Macdonald, argues that the small drop in US economic output shows investors may have got carried away in recent weeks.
She warns that the stock market rally may prove fragile:
As investors dismiss the economic contraction to focus on the resilience of consumption, they miss the risk that this will come under pressure over the coming months as fiscal cliff measures come into play.
Market rallies have been driven by the fear of an imminent risk receding, but growth is now needed for another leg up in markets. Instead, the ‘pain trade’ is now missing out on equity upside, implying fear of underperformance may be driving investment versus conviction in the outlook for markets going forward. Exemplifying this is the recent rotation by Hedge funds into financial stocks, following the positive earnings momentum, which of course is backward over-the-shoulder looking, rather than based on confidence in the future.
After hitting multi-year highs, can the FTSE 100 continue its recent rally?
NO – The FTSE 100 has been rallying as the fear of risks, like a Eurozone exit or fiscal cliff stalemate, has receded. But growth is now needed for another leg up: there has been relief in the diagnosis, but the patient must now show signs of recovery. The concern for the UK is that it is tough to see a possible source of growth, especially after the latest economic figures showed us courting a triple dip recession. Looking overseas – as many FTSE companies do – the outlook for growth is more encouraging. But troubles in Europe and the US are far from over, as the former grapples with fiscal and banking union, and the latter with delayed spending cut decisions. Equities may provide value over the longer term, but you will have to encounter heightened volatility – and a likely correction – in the immediate future.
