Monday, January 19, 2009

Market outlook flat to uncertain during 2009-2010

The stockmarket plunge that began at the end of 2007 and intensified with an intense panic that has pervaded markets since September 2008 seems to have largely abated.

Have investors just got used to feeling that way or have markets found a range that they are comfortable with and are looking for any positive sign or excuse for a market rally?

Experts are always telling us that the stockmarket is a good indication of how it sees an economy six months from now.

If that is the case then world markets-after the initial collapse last September through October-are seeing a flat global economy with little chance for recovery well into 2009. That is if we see indications that various stimulus packages from Governments worldwide manage to have positive effects on their respective economies.

I have my doubts whether these will work quick enough to stem the downturn.

The US 1 Trillion "rescue package" hurriedly passed at the end of 2008 to ease the credit markets and get banks lending again has largely failed and a proposed Barack Obama led stimulus package of about the same size but targeted at different areas of the economy looks like just more welfare that will once again largely fail in the long-term.

Even positive results in the August-September reporting season from some companies was either met with little positive upswing in share prices or a hope that there would have been a better result.

Either way investors are predicting negative times ahead for companies in their portfolios that are currently performing well.

You have to have balls of steel right now to be buying because the uncertainty over how long this current global recession will last is anyones guess.

If someone tells you they can predict just when the economy will recover they are either lying, trying to sell you something or just taking a stab in the dark.

What I do know is that the economy and markets will recover, because they always have but what I would be unwilling to predict is just when.

Related Share Investor reading

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Related Amazon reading

Contagion: The Financial Epidemic That is Sweeping the Global Economy... and How to Protect Yourself from It

Contagion: The Financial Epidemic That is Sweeping the Global Economy... and How to Protect Yourself from It by John R. Talbott
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c Share Investor 2009