Saturday 27 October 2012

What do you do when Stock markets are up in the past few weeks?

Stock markets have faced really torrid times in the last 2 -3 years. The subprime housing crisis in US had triggered a major downfall. There was an intermediate recovery and then it was Europe that spoiled the party. Greece has been still struggling under regular finance deficits. Euro has lost its charm. My foremost question is what has world economies done to recover. I don’t find any positive answer.
US and European exports have been struggling under immense pressure for some time now. The growth has been extremely sluggish and in fact negative in most European countries. The world economy is definitely under enormous pressure. Printing excess currency to fill deficits is not going to work too long. Some major economic reforms need to be induced. Excess paper cannot help you to sustain your economy. It is merely a strategy to alleviate the pain by prolonging the treatment for your wounds. Does this help? Well, it does for a shorter time period. But that’s really not going to work for the longer duration. Inflation is going to burn common man’s hands like never before. Talk about developing countries that thrive on export, they would be screwed more than anyone. Unless they have a self -sufficient economy, which is difficult to imagine, they will suffer endless miseries.

Stock market going up in the last few weeks is just some type of false correction. A major crash is in store for the future. It reminds me of the 2007 bubble when anything and everything went up irrespective of the fundamentals. Beware as such a situation is just around the corner. No matter what some of the top analysts say, just give them your ear but do as per your instincts. Remember these are the same analysts that were giving higher targets just before the mega crash in 2008. Sell stocks in small amounts on every rise. Eat up your profits. Don’t let the greediness dominate you.

You will find multiple opportunities to get into the market. It’s time to secure your money and park it in tangible assets.
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