Monday, May 31, 2010

If this is not a Wall-of-Worry then what is?

You look at recent headlines and you may think that there is no end to our economic gloom. Greece, Spain, rising interest rates, minority government, big deficits and falling - no crashing or about to crash - stock markets, collapsing oil prices, etc. Wow life is terrible!

Yet the stock market is near a 52 week high, barely 700 points below the 12400 high of the TSX. Yeah a market crash must be unavoidable. Oil is around $75 and seems not capable of falling below $70 for any significant length of time. Then we're learning about record quarterly earnings of the banks, and Toronto and Vancouver real estate prices at top-heavy levels. The deficit is noticable less than expected and B.T.W. the Canadian economy grew a measley 6% (annualized) in the last quarter - biggest rise in 10 years or so.

Surely the world is coming to an end... or let the good times continue. Guess what, I like these 'walls of worry' and the continuing hand-wringing of famous bears whose names I seem not be able to remember and of whom we never heard until the last crash. These are the times to buy stocks and real estate. These buying opportunities won't last, whether it is investing in dividend, positive cashflow or good value in Alberta.

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