Stocks
Traditionally, the year after Presidential elections is the most difficult for stock investors. Government spending is often curtailed. All around the developed world, be it China, Japan or Europe, export markets face problems. Excessive debt has depressed spending power by our traditional trading partners, and debt threatens our country. For these reasons, we look for a difficult year.
In spite of volatile markets and uncertain days ahead, opportunities exist for good investment returns. As 2012 ends, excessive pessimism makes stocks temporarily more attractive than bonds. Lower energy prices attract business ventures from here and abroad, while consumers yearn to replace aged automobiles and move into better homes. Profits for financial companies shift higher as their interest costs are low.
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Positives |
Negatives |
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The FED is flooding the markets with money (Quantitative Easing) |
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Stock prices are not at bargain levels |
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Cheaper energy revitalizes consumption, encourages industrial production |
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Corporate earnings outstrip corporate revenues |
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The fleet of automobiles on the road are aged, many need to be replaced |
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Taxes are going higher |
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The housing slump is ending |
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Post-election years are historically difficult |
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Low borrowing costs benefit financial institutions |
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Economic growth has been slow |
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Abundant liquidity is available for stock purchases |
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Government defense spending may be curtailed |
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Economic Outlook
- Annual Outlook from Fund Advisor
- Provides recommendation for Investors
- Forecast for Economy, Bonds, Stocks and International
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