Posted on 20 March 2012 by Douglas Chadwick
Some three months ago, we discussed the potential for a continued recovery in the American Markets.
Well, since then, funds have averaged about a 12% gain, with most of that taking place in the first two months, and only around 2.5% in the last month.
So will they continue to recover going forward, is the question, remembering that the Dow Jones Index has recovered from the 7000's three years ago, to recently clear the 13,000 hurdle - not bad progress!
So, what has America got going for it today? Well I believe a number of positive things....
- It still retains global dominance in new technology and design innovation.
- It is heading towards self sufficiency in its fuel and energy requirements by 2018.
- Housing prices would seem to be coming off the bottom - an indication of the recession loosening its grip.
- Unemployment has started to fall as some manufacturing is being repatriated back home.
- American businesses and consumers have been reducing their debt quicker than their European counterparts.
- By and large, American stock markets perform well in election years, and 2012 is an election year.
- Due to immigration, both currently and in the past, the average working age in America is considerably lower than in Europe.
Now all of the above is a pretty convincing argument for continued good performance. But there are a couple of niggling questions...
- Will the Fed continue to support the economy, if it is necessary to do so, using Quantitative Easing after the election?
- Secondly, there is a great silence about what has happened to the 'Toxic Debt' in American Banks and Financial Institutions - is this now under control? After all, that was a major cause of the world's recent financial collapse.
So what to do?
Well it is really simply a question of following the numbers, and Saltydog Investor provides them on a week-by-week basis