Hey! I went for my first swim in the Mediterranean Sea today. Wow, was that ever a chilling experience. I then stretched my towel in the sand and took a nap in the sun. I know, I know – I’ll quit complaining about how hard my life is these days …
Speaking of hard … How about 13,000 and barely holding on the Dow. The market popped this morning, as all those laggards woke up to the fact that the market might be slipping away from them, and then all the worriers woke back up, as they thought the market was getting ahead of itself, and now we have our normal seesaw market back. At least things are consistent with the market.
The ECB came through today with its smashing big offloading of money to the European banks ($713 billion). This money will go a long way to reshaping confidence, or lessening a lack thereof, in the minds of investors who not too long ago were worried about a total financial crash in Europe, and, for that matter, across the globe.
Thinking back on the “sounding of that alarm” from some pundits and analysts just three months ago, I wonder how it will turn out. I wonder if it will turn out as the Dow has turned out, after some were saying as late as last fall that the Dow was headed back to the lows of 2009, and a tiny few suggested even further. Okay, okay … I will not get ornery today. I am in such a good mood after my swim in water temperature that made my eyeballs hurt. I did love it so, though …
So, Mario Draghi unleashed the hundreds of billions he promised, and now it is up to the EU nations to do as they have promised to do, which is tighten up the financial and political framework that holds them all together. My guess is this will get done here in short order, and then they can begin to either help the bad players back on their feet, or they can kick them out with less bad ramifications for the EU economy and the euro.
As I write this, the Dow has crossed hard into the red, reversing just about 100 points. Well, it sure is good to feel normal …
There are reasons for the volatility, no doubt. One of those is the continued doubt of many investors about the market’s steady move upward in the last four months. Perhaps, they are still following the oracles of doom. I usually don’t give explicit advice in this column, but … No, I won’t start now, and I still refuse to get ornery.
Despite a bull-market surge over the past four months, retail investors continue to shun stocks, missing out on one of the biggest rallies in years. Bond funds over the past four weeks have taken in a staggering seven times as much money as equity funds, continuing a pattern that has held steady since the cycle run began, according to TrimTabs data.
On the explicit advice thing … Do not take your eye off the ball. The money mentioned above will eventually come back into the equity market, I can assure you. Where it will go is open, but keep in mind that investors, when chasing the market, will usually follow the money …
Banks have helped lead led the 2012 stock market charge, with financials on the Standard & Poor’s 500 up 13.5 percent, making it the second-best performing sector after information technology.
Trade in the day – Invest in your life …
