On a global scale, investment in real estate almost doubled from $76 billion one year ago to over $132 billion in just the first half of 2010. It is understandable that this piece of news is under reported, as the U.S. real estate market is still floundering; however, as the cycle continues to move through its phases, the U.S. real estate market will, eventually, join the parade, which will bring it into step with the other aspects of the economy that are recovering.
Sales at U.S. retailers posted their largest gain in five months in August on strong receipts at gasoline stations and clothing outlets, further assuaging fears of a double-dip recession. The increase in retail sales, which are a measure of consumer health, was the second monthly gain in a row and was a touch above market expectations for 0.3 percent rise. Sales rose 0.3 percent in July.
The retail numbers show improvement, but there is still a ways to go, and I believe a bunch of that distance will come in this year’s holiday shopping season, which should put to rest the notion of a double-dip recession, and it just might. “Expectations were that the economy and consumer were really running out of gas, so to see this type of data, given that expectations were beginning to come down, is significant,” said Lawrence Glazer, a managing partner at Mayflower Advisors in Boston.
Okay, I am not claiming that the boom times are here, yet, but they are coming because as the consumer loosens the purse strings, businesses will continue to build inventories in anticipation of growth, which, ultimately, means they cannot avoid hiring more people.
So this should all be good for the market, right? Well, the retail news is helpful, and the financial news out of Europe (Basel III) is helpful, and the global manufacturing news is helpful, but the volume in the market is still light, which raises a concern about the strength of the recent rally. So with all the recent decent economic news, why is the market volume light? One reason is the following.
In an Associated Press-CNBC poll of investors, 61 percent said the market’s recent volatility has made them less confident about buying and selling individual stocks. And the majority of those surveyed — 55 percent — said the market is fair only to some investors. The perception that the market is unfair is widespread. Nearly 90 percent of those with portfolios of less than $50,000 said the market is unfair to small investors. People with substantially more money agreed. More than 75 percent of investors worth at least $250,000 say the market is unfair to the little guy.
I understand this. Back in the fall of 2008, I certainly considered pulling out of the market completely. I did not, and I am glad that I did not. The tremendous opportunity to make money was and is an opportunity that comes along only when the cycle turns to the bottom. Getting in on the way up is the key to taking advantage of the opportunity presented. My friends, maybe I am wrong, but it looks to me as if the cycle is slowly turning to the upside, and if this is true, then trading/investment opportunities are coming. Are you ready?
Trade in the day; invest in your life …
