I haven't written in a few days, as I've been focused on trying to formulate and put together my investment strategy and approach as I look out over the next 3 months. To say the least, the market has frustrated me as the U.S. economic recovery, improving housing market, and stable financial system is being ignored and trumped by the nightmare which is also known as the European financial crisis (thanks Greece).
I'm a fan of the Rolling Stones, and one of my favorite songs they sing is "You can't always get what you want", http://www.youtube.com/watch?v=2C2W_O9BX4g
and that's pretty much how I feel about the way the market has been acting over the past month. Think about this, if Europe had their act together, and our economy and housing market were to continue to improve, then things would be rather rosy...however they are not. We are still dealing with the crisis in Europe, the verdict is still out on how China's economy is going to act, and the politicians in Washington can't seem to get anything done. I hate to be such a downer, so now I'm going to spell out the reasons why I think now is a very attractive time to be invested and as stocks go down in price, I'm going to be a buyer on weakness.
1. The U.S. economy is stable and growing at a slow pace
2. The U.S. banking system is well capitalized, stable, and business for them is expanding
3. U.S. corporations boast strong balance sheets and have a great deal of cash on hand
4. The U.S. consumer is liquid, somewhat confident, and more stable than those in Europe
5. Despite not seeing any compromise in Washington, the U.S. political system is stable (unlike in Europe)
6. The U.S. has a solid and transparent corporate reporting system where investors know how a company is performing and how their businesses are going
7. The U.S. is rich in natural resources (oil, natural gas, etc)
8. The U.S. has a functioning and forward looking banking system that is constantly monitored by the Treasury and Federal Reserve
9. The U.S. dollar is the worlds reserve currency as it is much more stable than the Euro
10. The price of oil has dropped dramatically which will serve to give U.S. consumers more money in their pockets that they can spend and put back into the economy
12. At some point soon, we will see a massive reallocation out of fixed income/bonds and into U.S. stocks
These are just some of the reasons why I believe stocks are starting to look extremely attractive and why I am of the opinion that now is the time to be looking to buy stocks and mutual funds (altho do so at a slow pace). I am in no way trying to make a short-term market forecast as that is merely a flip of the coin, but I am writing to say that if someone is looking to invest for a longer period of time, then stocks are cheap and in my opinion should be bought.
