Sunday, February 12, 2012

Are Global Markets Becoming More Uncertain?

Early last week, as many global equity markets approached a 20% or more increase from their October lows, some market participants announced the arrival of a new bull market driven by 1) improving global economic data, 2) stabilization of Eurozone economic dynamics and 3) a significant declines in market volatility. By week’s end, investors seemed slightly less confident as Greek troubles lingered and Chinese trade data for January had its biggest decline since 2008.


MY TAKE

It is likely that economic cross-currents will continue to test the durability of many investment strategies.  In this environment, consistent execution of investment plans is critically important.  Notable increases in European and emerging market equity volatility, as well as short-term weakness in the shares of firms such as General Electric Co., may indicate that the strong move up may be losing steam.

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