Thursday, March 31, 2011
Stock Market: All Wheels On Fire
The reason for the rising stock prices is the continuing upswing in the world economy - despite disaster and crises: The profits of the companies are rising swift, the job market is recovering, the consumers are spending more money and the CEOs of the companies are showing more confidence and invest more in mergers & acquisitions.
The stock market rally in Q1 proves again, that disasters don`t have a lasting impact on the world economy. The nature, and the humans and their economy are just a part of it, is always recovering swift. Any forest will quickly recapture the space, which it lost in a fire, and grass will reclaim ground, even when covered by concrete.
The humankind survived a lot of plagues, catastrophes and world wars and got even stronger. The wealth of the western world (Europe and later the Americas) is rising since the 15th century, with an accelerating speed.
The rising global wealth is reflected in the stock prices, which rose in the last 100 years on average with a 10% gain annually. There is no reason that this positive long run trend comes soon to an end. Since we are now recovering from a severe recession the pace of the stock market gains could be even higher in the next months. Good perspectives for investors.