Slovakia says yes
by Peter Switzer
In case the past nine months of negative news on the stock market front has dulled your enthusiasm for stocks, it’s worth noting that the Dow went into positive territory for the year.
The question is, can it build on it? My answer is, given the known unknowns called the EU and its member PIIGS countries, I think we’re in for a good chance for a positive finish to 2011. That said, the ducks and the planets have to be in alignment.
The Dow ended 102.55 points, or 0.9 per cent, higher to wind up at 11,518.85 and the turnaround in stocks since Europe started getting its act together shows how unnecessary the stocks sell-offs have been this year.
The catalyst for the positive day was Slovakia voting yes to the EFSF, which is the rescue fund for the debt-laden members of the EU. There are going to be more hurdles for Europe to jump over but at least an important one has been beaten.
Taking a bit of gloss off today’s Wall Street finish was talk of higher reserves for European banks, which could effectively cause a reduction in the size of banks.
On the US economic front, mortgage applications went higher and while this isn’t significant, I’m happy to see more ‘green shoot’ developments on the US economic front.
From what I’m seeing, I’m happy with my advice to keep looking for great quality companies that pay dividends. I like them better when they’re cheap, such as when everyone is panicking, but given current valuations they look like a no-brainer for the long-term investor who is happy to beat the rates paid out on term deposits.
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
Published on: Thursday, October 13, 2011
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