Buying the US market during the fiscal crisis was easy. But since then I have been more cautious. Here is a summary of what I see:
– It looks like equities will go higher because investor sentiment is good, so there is strong momentum.
– But, the fundamental situation is less clear now.
– US equities are not so cheap now as they were before the summer.
– The US fiscal crisis caused negative impacts on the US economy, which the market has not considered.
– The fiscal crisis is also not finished, so economic growth will continue to suffer until January.
– There will be a new leader at the US central bank in January, this is often a cause for volatility.
– It is no longer clear that QE is helping the economy. Continue reading