By FX Empire.com
Do You Believe in the January Barometer
The exchanges have begun an incredible start to the year, which should bring the majority of market participants under pressure. With the improved markets, the Dow Jones “only” 3.5% up, but this meant the best January since 1997 (full year, then +22.6%). The Dax was up 9.5% even up until now this was the fourth-largest gain in January, and the highest since 1996 (which ended with +28.2%), and only in the 70s were there two more successful Start months. I
The stock markets around the world need to be primed so that the new bull market can rely on a strong market diversity and growth. This month the NASDAQ hit a new ten-year high, the Indian DBIX already climbed since the beginning of the year by as much as 23.5%.
Our share markets gained an average of 5.6% in January, one in four with double-digit growth improvement. Companies such as Caterpillar and ElringKlinger are up more than 20%. Meanwhile, in 2012 there are 20 shares at all-time highs, and as the precious metals rallied strongly (+14% gold, silver +19%), we started with off perfectly into the New Year. Following the positive indication by the first trading day of the year and now the January statistics indications for prices to rise further.
The so-called January Barometer states that the U.S. stock markets will follow later in the year the January trend. In fact, the Dow Jones has ended, surprisingly, 24 of the past 30 years with the same sign as the January, representing a success rate of 80%.
Of course, such statistics or folklore is good not for investment decisions, but the stock markets are benefiting from an exceptionally favorable environment. As suggested by the negative sentiment we have seen for months from lethargic institutional investors and asset managers.
Since the ECB and the Fed (which now has even officially extended its zero interest rate policy until the end of 2014) to the financial markets which flood with more paper money, there are no alternatives anyway to property value investing. With a negative real interest rate there should be a call for large capital investment Perhaps after a technical market breath in the second quarter, we should enter into the second half of the year watching many stock indexes reaching new historic record prices!
Will the January barometer hold true… Or are we just hoping…
Originally posted here
