Its the one of the hardest questions to answer at the moment for the economy. Some are predicting things are set for another tumble while the others are quite optimistic. Some big corporations in the past week have posted handsome profits and this has caused people to believe things are going to get even better. If you weren't observing, the rally since March 2009 till today is quite unbelievable, the most daring people in this period would be really smiling to the bank, returns are at least 50% since. The problem is whether this rally could really sustain? From what I have read, people are a little impatient at the moment and anything positive are driving values out of its fundamentals. The White House had a forecast unemployment could settle at 8% this year but it is already 9.5% and is almost heading to 10%.I am not sure how they also forecast a 4% growth under these conditions where contractions are still happening. Probably they were trying drive some optimism into the people for voting them into the White House.
There has been many circumstances where things have taken a few checks along the way. Crude Oil rallied all the way to over $73/bbl recently driven by demand by China. The speculators outdid themselves and a week later when inventory eventually piled up, crude dipped all the way to $59/bbl. Volatility at the moment is probably at its highest. People want the recession to be over now and this is a problem. There also people writing that the rally at the moment is also due the massive stimulus by governments around the world and they are worried things might dry up soon if the fundamentals are not there. The positive news, things will eventually recover gradually, it always has and should continue. The big brother of the world (US) is still a major force in determining the fate of the rest of the world. Obama really needs to step up and reform the healthcare, social security, war, minimise a mind-boggling deficit, restore confidence in the dollar and prevent its treasury bill holders from getting nervous. Those are just parts of the problem right now, he also has to deal with the declining confidence of the people. Polls declined again today. So a quick recovery, probably not yet.
But people should still be rational and remember this is probably the BEST opportunity you could ever have. The opportunities are still there for the taking so be on your toes at all times. Be patient and update yourselves. Probably not once in a lifetime but you really don't want to miss it. There's no secret that equities will outshine any other investment in any condition over the long run so keep tabs on it if possible. I have a friend who had a quote, "Any day is a good time to invest, there are just times when it is better". Guess when's the best time?...NOW!!! Last tip, be calm no matter what and only buy things you understand very thoroughly. There's really no secret.
Wanna wish my bro Loon Hung a very Happy Birthday today and hope it would a nice birthday with his girlfriend. On another note, another year has gone by without Dad so things are always bittersweet on this day. Some days seem to have many events in one. Anyway, everyone have a good day!!
~deyao~
Update on Australia soon..
