nobody knows what’s going on
I write a stock market commentary primarily to give my mother my opinion. I’m not sure anybody else cares what I think about the stock market. Here’s what I think.
Volumes on the New York Stock Exchange are very low, and have been for a long time. This reflects a general disinterest in stock investing, which in turn is a reflection of the extremely unclear status of the stock market. Nobody really knows what’s going on, and that includes the professionals. You know that nobody knows what’s going on when the Wall Street Journal comments upon this fact (yesterday). Nobody knows what’s going on because the economy is on artificial life support. We have a recovery without job growth, which is a preposterous contradiction. There is a lot of global uncertainty thrown into the mix, such as sovereign debt worries, and the probability of the Chinese economy overheating. Because of these factors, and others, anybody who gives you an opinion about what the market will do is just guessing. In truth, there is nowhere safe to put your money at the moment. I know, because damn if I haven’t been spending 14 hour days looking for somewhere safe.
The market will probably exhibit very high volatility for the near term. This means, in layman’s terms, that the market will whip around a lot without making much real progress. There are various technical reasons why I predict this, but the truth is anything is possible. Most analysts predict a decline in the second and third quarters of this year, and a rise in the fourth. Most predict the S&P500 closing at around 1300 at the end of this year. I’m not sure what their reasons are for predicting this, and I’d say it’s as good a guess as any in a completely unpredictable environment. But I wouldn’t put your money on it.
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