The markets opened down about 1% this morning once again as a result of the seemingly unending poor economic growth and the financial crisis affecting (or is it effecting those always confuse me) different European Union Countries. On top of that broken record, Warren Buffett, one of the richest men in the world and the famous Wall Street investor said this morning in an interview that he is seeing the U.S. economic growth slowing down a bit, mostly because of what is going on in Europe. He also cited the continue dislocation we are seeing out of our politicians in Washington as hurting the economy as the two political parties have yet to agree on a financial reform package.
The good part of news that came out this morning also came from the interview with Warren Buffett where he said that in looking at the multitude of companies that his large conglomerate (Berkshire Hathaway it's called) own, he believes the housing market has bottomed and is actually started to see small signs of growth. If this continues he said, he believes that overall consumer confidence and consequently consumer spending will increase and hopefully this would translate into economic growth.
I'm still concerned with the growing tensions we are seeing out of the Middle East, which is of course causing the price of oil on the markets to increase (as I've said this acts as a tax on the American consumer so we need to watch this).
Overall corporate earnings reports that have begun to come out have been mixed with some technology companies missing their estimates as government spending around the world has dropped off a cliff. Companies that rely on oil and natural resources to manufacture or transport goods have fared well as the price of oil has been so low over the past couple of months. I'm waiting to see how the banking industry looks when financial companies release their earnings over the next several weeks - I'm a little nervous about them.
With 2 hours to go in the trading day, stocks have gone from being down 1% to being positive to just now dropping back into negative territory. Needless to say we are in a market that is random and has no memory from day to day. Even though I look at stocks and research the market on a daily basis, it is extremely difficult to navigate at a time like this when their are so many unknowns; added to this the majority of the trading and stock movement that takes place these days is done by computer generated trading programs that cause huge swings up and down in the markets. Because of this, now is not a good time to be a buy and hold investor unless you've already establish investment positions or you have a long term investment outlook (it's actually a great "trading" environment but that is very difficult to do and is somewhat risky).
If we close down today, that will be the 6 straight day that stocks have been down; that being said stocks are starting to look more attractive as their prices go down (buy low sell high). I'm going to start moving some money into the markets in the near term as I look to invest in safe and secure high dividend paying stocks.
