Gridlocked Governments Good For Equities

[Guest_ringledman_*]

Political risk aversion dives from its highest level in mid-year two to its lowest level in mid-year three and stocks love it. The third year of a US president’s term hasn’t been negative since 1939 – when it was just flat – and US shares average returns of 17.5 per cent in year three.

http://www.ft.com/cms/s/0/856d4dae-f26f-11df-a2f3-00144feab49a.html?ftcamp=rss#axzz15jdQ07hY

The stockmarket is the only place to be, together with 10% in Commodities.

Bears, 'the market will climb a wall of worry'.

The negative sentiment about the market, the daily 'black monday' threads, bears you need to understand - markets love negativity amongst joe public.

Once stocks are loved again will be the time to sell.

Until then we are in a multi year bull market.

Edited November 19, 2010 by ringledman

[Britney's Piers]

What correlation does the stock market have with the real world?

As in how does the ability of a company to make money affect the price, or is it all to do with how "loved" the stock is?

Edited November 19, 2010 by Britney's Piers

[Guest_ringledman_*]

What correlation does the stock market have with the real world?

As in how does the ability of a company to make money affect the price, or is it all to do with how "loved" the stock is?

There is a slight un-correlation between GDP growth and strock market returns.

Generally low growth countries produce better stock market returns, the reason being the starting position for the stock market is lower in terms of P/Es and dividend yield.