While market oscillates, more capital flows into equity stocks. The growth in personal wealth raises the demand for wealth assets. Many analysts recently change the tone to optimistic on market outlook. Individual investors see growth in the portfolio and stabilization of the economy. The attractive return of equity stocks regain confidence of investors.
The speculative trading portfolio is suffering further loss in this market pullback. The stock positions repeatedly set low record on heavy selling. The purchase of these stocks is a mistake in investment decision. At the time of purchase, market is expected to advance further which has actually occurred but the stocks fall significantly due to its own performance issue. Unfortunately this is not happening just to single stock. The small size of the portfolio restricts diversification and coverage. Although the stocks value have been trimmed significantly, there is no symptom of bottoming.
It is difficult to make liquidation decision in this situation. From previous experience, the majority of losing investment will turn into profit if held onto present moment. Undervalued stocks can be suppressed for extended period of time but sooner or later the value will recover through market mechanism. But as stock market is manipulated, short term performance can be irrational. The stocks in the speculative trading portfolio may be at bottom or may drop further. For long term investment, the stocks in the portfolio are bargain at this suppressed value. But holding under performing stocks have opportunity cost and the speculative trading portfolio objective is short term trading.
The outlook for equity stock remains optimistic despite recent strong rally. The valuation becomes less attractive as before but still within reasonable range. Support partly comes from demand by hot money. On the other hand, traders are speculating violent movement in stocks as market trading activity remain low but capital flow is tremendous.
Goldman Sachs eyes $3 billion property debt fund: report
A private equity arm of Goldman Sachs (NYS:GS - News) is looking to launch a $3 billion property debt fund in a bid to take advantage of a growing shortage of real estate financing across the UK and Europe, British newspaper the Times said on Monday.
Europe's property industry is grappling with a widening debt funding gap, the shortfall between debt needing refinancing and the money available do so, as more banks slash lending to the sector in a bid to comply with incoming solvency regulations.
Q2 Kicks Off: Why the Stock Rally May Still Have Legs
The S&P 500's 12% gain to start the year gave the index its best first quarter since 1998, and if history is a guide, that may point to a continuing advance for the rest of the 2012 -- provided traders believe the Federal Reserve will keep the money spigot on and the economic data don't signal a collapse.
Did you miss it all? If so, you've got company. Many individual investors are still reluctant to fork over their cash for equities, having developed a serious aversion to the pain the market can inflict. Getting in now might take some nerve. Positive history aside, at least some degree of caution seems to be fairly common among market professionals, even if of late selling hasn't been.
Morningstar only recently was keying on three factors that it felt would send stocks up this year, though not necessarily so rapidly. Those were: Demand for hard goods, healthy corporate balance sheets and better earnings, and "reasonable" profit multiples.
"We continue to believe the U.S. market will benefit from the first two, but after the stunning rally of the first quarter, valuations are not quite as attractive as they were," the firm said in a recent research report.
"As money pours out of bonds and into stocks, if there is one thing that is clear it's that zero rates are forcing people back into the stock market," the traders who run MrTopStep.com, a futures and options education site, wrote last week.
An election is of course coming in November, and that may have something to say about the year's outcome as well. The S&P on average gains about 7.7% in presidential election years, according to research covered here. There's no doubt some U.S. data have been signaling a rebound and earnings have been positive, but other indicators have continued to point to a sluggish healing. Add in uncertainty about China's growth, stubbornly high unemployment, the sovereign debt situation in Europe, and you can see why it requires a little faith to believe that strength is more likely than weakness. But if it really is largely about the accommodating Fed, the rally might not be over yet. And again, history is on the market's side.
Car sales surge as recovery gains steam
Auto sales rose more than 15 percent in March, preliminary data showed, as rising consumer confidence and cheap financing quickened the pace of a sluggish recovery more than two years in the making.
The average age of vehicles on U.S. roads has risen to near 11 years, the highest on record. Many of those vehicles are SUVs that were sold in the late 1990s. Rising fuel prices, combined with lower interest rates, have drawn consumers into showrooms to seek more fuel-efficient replacements.
As sales rise, automakers are also getting more profit per vehicle. Incentives, including rebates, continued to trend downward in March while the average transaction price for a new vehicle rose 7 percent to just under $31,000, a new record high, autos consultant TrueCar.com said.
Consumer confidence rose in March to its highest level since February 2011, the Thomson Reuters/University of Michigan reading of consumer sentiment showed.
Analysis: Investors skeptical about genuine global-market recovery
After so many false dawns, long-term investors face the growing problem of how to recognize a genuine, sustainable recovery in global markets - whenever it eventually shows up.
In the wake of one of the steepest first-quarter rallies in world equities in more than a decade, it's been tempting to hail the return of more "normal" times, where the cyclical ebb and flow of the economy dictates predictable investment patterns.
But skepticism remains sky high, and it still doesn't feel right to many investors.
The most obvious metric over the past six months has been the disconnect between super low top-rated government bond yields and surging equity prices and the extent that this reveals both the government bond market intervention as well as innate skepticism about the economy.
In now elusive "normal" times, core government bond yields should rise and fall with equity prices.
Intuitively, economic growth lifts company profits and stock prices. And, in turn, that growth erodes spare capacity and generates price pressures that prompt investors to demand higher bond yields to compensate for future inflation risks.
Yet, for bond managers such as JP Morgan Asset Management's Nick Gartside, the biggest central bank liquidity flood since 2009 means the equity/bond debate is almost redundant and in this environment investors just need to decide what bonds they want - government, corporate or emerging markets.
"The decision for investors will not be whether or not to be in fixed income, but where best to allocate to take advantage of the opportunities," he said.
Market’s Lost Decade Will Recoup by 2020: O’Shaughnessy
You could call it the law of averages, reversion to the mean or a counter-trend reversal, but by any name, 150 years of stock market analysis reveals the same truth.
"What we found when we did the 20-year cycle analysis is that when you come off a period where you've done unusually well, like we had in the period ending in March of 2000, the next 20 years don't look so good" says Jim O'Shaughnessy, founder of O'Shaughnessy Asset Management and author of What Works On Wall Street.
As O'Shaughnessy tells it in the attached video, "not so good" would have been the case under normal circumstances. However, those double disasters of the last decade changed everything for the second half of this 20-year cycle.
"What we didn't count on was that we'd have a decade with two severe bear markets in it," he says, noting that the only other time that happened was the 1930s.
But since it did, our reward for enduring all that turmoil, for being so far underwater, should be outsized returns for the remaining eight years out to 2020. The catalyst for that move is actually two-fold.
First, there is just some old fashioned catchin'-up to do. Secondly, he says there's going to be a sort of "ah-ha" moment in which investors acknowledge that a 2% bond yield in a 2% inflationary environment is a loser. And once they do, he says they will act.
World food prices rise further, raising fears of unrest
Global food prices rose in March for a third straight month with more hikes to come, the UN's food agency said on Thursday, adding to fears of hunger and a new wave of social unrest in poor countries.
Record high prices for staple foods last year were one of the main factors that contributed to the Arab Spring uprisings in the Middle East and North Africa, as well as bread riots in other parts of the world.
The cost of food has risen again this year after coming down from a February 2011 record peak.
"We will be 7.2 billion people on earth in 2015, and more than one million have died from starvation in 2011. The situation will not improve, and in fact the contrary will happen," Pierre Reuland, Interpol's special representative to the European Union, told a meeting of European security officials in January. "For poor people the struggle for life will not be better than it is today."
Facebook to List on Nasdaq : Source
Facebook's highly-coveted "FB" stock will list on the Nasdaq when the company makes its public debut in May, according to a person familiar with the matter.
The listing decision marks the end of a tense and drawn out courting process between the company and numerous executives at the NYSE and rival Nasdaq. Both exchanges launched aggressive marketing campaigns to woo the multi-billion dollar listing, and have made numerous pitches to the company in recent months.
Facebook has filed paperwork with the Securities and Exchange Commission for a $5 billion IPO. The offering is being led by Morgan Stanley, Goldman Sachs, JPMorgan, Bank of America, Barclays, & Allen & Company. A total of 31 banks are advising on the deal.
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