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Increased Risk Aversion, August 14, 2006
Summary: Markets are struggling because a host of concerns is prompting a greater preference for safety. All risky assets have experienced softness and the reasons vary daily and asset by asset. It appears that a period of calm is needed for investors to refocus on the attractive values now available in the market. Indeed, markets always struggle during tumultuous times, but these also create the best investment opportunities for those with the fortitude to buy while others are selling.
Markets are struggling because a host of concerns is prompting a greater preference for safety. All risky assets have experienced softness and the reasons vary daily and asset by asset. It appears that a period of calm is needed for investors to refocus on the attractive values now available in the market. Indeed, markets always struggle during tumultuous times, but these also create the best investment opportunities for those with the fortitude to buy while others are selling.
Negatives news has been ongoing and highly varied. The Fed raised interest rates and investors worried that rates will rise further, the economy will slow excessively, or the economy won't slow enough, or inflation will continue to rise, and interest rates are already too high. Variations or combinations of these concerns are seen, sometimes on the same day and often within a few days of each other, even though some...
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This section contains 396 words (approx. 2 pages at 300 words per page) |
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