Jumat, 29 April 2011

Nowhere to go but up?

Are you scratching your head trying to figure out where this market is headed? Or maybe better put, why it's headed up now, when all indications are it should be bouncing along going nowhere or trending down?

Me too, but I have a theory for why it's headed the other way. I can't help but wonder if the fuel behind this rally is the lack of fuel for another crisis.

Can you think of any classes of investment that could be taken behind the woodshed? That's what happened in 1987, with stocks in general. It happened again in 2000 with internet stocks. This one was precipitated from real estate and debt speculation. What's left?

Could all this be happening simply because there are no other misbehaving investment classes? (At least none that we know of.) Maybe so. If true, then it's safe to say confidence in the system, in the economy in general, and the economy's ability to recover from a strong shock in particular is building.

But it won't build forever, not all by itself. The real question therefore becomes: Will these gains prove sustainable? Will the up trend last long enough for some glimmer of hope of recovery to materialize?

Source: http://www.myinvestmentblog.com/nowhere-go

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