Sunday, 15 February 2015

Here's what to really fear about the stock market

Six years into the bull market in stocks and there's no shortage of scary things on investors' worry list.

From Vladimir Putin and Greece to the dramatic plunge in oil prices, something is bound to trip up the stock market, right? After all, the good times on Wall Street can't last forever.
But the key to knowing where stocks are going next is focusing on the real risks to the market, not the irrational ones.
Fear a bubble in bonds, not stocks: Yes, stocks are up over 200% since the 2009 lows. And yes, the Dow is once again trading above 18,000 and the S&P 500 is just hit a new record.
But stocks are barely positive on the year. Valuations look a bit lofty, but not insanely high. There are good reasons for stocks to be up: The U.S. economy is humming along, the jobs market is finally looking strong and corporate profits continue to smash records.
Related: Greed is back! Stocks at all-time highs
It's much tougher to justify what's going on in the bond market. The yield on the 10-year Treasury isn't far from an all-time low. That usually happens during times of market stress, not when stocks are soaring.

Read more at Click here / www.trade4x.net


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