Thursday, June 20, 2013

Stock Market: From Weak To Strong

(Drivebycuriosity) - This morning the stock market is under pressure again. Stock prices are still responding negatively to yesterday´s Fed announcement that her stimulus program QE3 will run out through mid 2014 (tapering).

Stocks are now getting passed from weak hands on strong hands. Gamblers with a very short time horizon, including many hedge funds, are selling, investors with a longer time horizon are buying.

I reckon that the investors are right and that they will rewarded soon. Yesterday´s Fed decision signals more optimism. The U.S. economic upswing is now sustainable. Rising company profits, climbing retail sales and further healing job & home markets will fuel the economic growth in the coming months and induce more stock market gains. History also shows that stocks are the best investment on the long run  (ritholtz   ritholtz Soon the gloomy professionals, who are selling today, have to come back, otherwise they would miss the upcoming stock market gains (performance pressure).

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