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Stocks Rise as Predicted

Updated on June 15, 2010

Study, Patience Reward Investors

The volatility that has dogged the stock market and saw investments reduced by one half since 2008 appears to be normalizing somewhat.. The come- back began in March, 2009, when stocks began to make a return to normal. It was not an easy transition and many investors still don't trust that the 60% rise is for real.

There has been an influx of investors to bonds, though bonds are downright miserly in their returns. Some are returning one or two percent, hardly even keeping up with inflation. Lately, investors are shunning the bond market.

Jobs are a major problem. Growth is slow. People have been afraid but the market performance for the last few months is excellent. Especially when you consider that retailers, for the most part, have not seen business return to normal. Few realize that the market crash in 1929 saw stocks rising out out of the ashes, as alert investors bought up stocks at bargain prices.

Exceptional stocks with great and growing companies(and great managers) continue to rise, no matter what the other stocks are doing.

Dividend yields, with few exceptions, are way down. Even foreign markets have reduced their traditional dividend to below average.Returns of less than 6% are not now uncommon.. This is a sharp decrease for European stocks, which have held dividends at 10% and higher for many years. However, those holding foreign investments are still realizing nice gains from the favorable exchange rates for the U.S.

The fuel drivingĀ  the new bull market is not empty chatter, but real earnings, by large companies who are also seeing an improvement in productivity. Medium and small cap stocks especially are increasing in valuation and in price.

Gold has been on a tear for several months, recently breaking $1000, a new record. Other commodities like coal, uranium, zinc lead, and steel are fueled by continuing demand from India, Russia, and Brazil, whose economies continue to lead the rest of the world in growth. Australia and Canada, along with South America may be expected to supply much of the mining commodity growth. The race to bring alternative fuels to the energy market is going to impact all countries, just as climate change looms large on the horizon.

If there is any secret to investing, it is to know and research your picks well, hold them until they prove otherwise. Normal corrections are not a good time to sell.. You will eat up your profits buying and selling the same stock as your broker gets rich. Stocks that pay dividends may give you cash during deflationary times and often signal excellence when combined with other fundamentals.

This is not a solicitation to buy or sell stocks or to invest in the stock market..


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