A good article posted in the WSJ a few weeks back regarding investor sentiment. Sometimes I find it helpful to read the paper a few days or even weeks after they are written. At times you can get caught up in all of the attention grabbing headlines produced by the main street media and lose focus on your investing objectives. For example I listen to CNBC on a regular basis but don’t let if guide my investment decisions. Instead I use it for some informational purposes and a little entertainment value.
One of the big drivers behind this week’s rally has been the speculation in Europe that the leadership there is close to devising a plan for their ongoing financial crisis. This has been a constant theme over the past week and has led to a good portion of the increased volatility. Perceived good new (work out plan) in Europe = rally in US stock market.
Investors Sing a New Tune The article points out 3 drivers as to why you shouldn't be suckered back into stocks
- Ongoing crisis in Europe
- Economic slowdown throughout the world
- US debt issues
All three are valid points but over the past two weeks as most major market indexes have climbed 10% and out of the red for the year it proves that once again to have some skin in the game can pay off with this increased volatility. This is where it is always handy to keep some cash on the side and a watch list of companies that you would like to own. Volatility can give you great entry and exit points.
No comments:
Post a Comment