Quite a setback on the equity markets, with Asia leading the way in reaction to the European crisis and the monetary race to the bottom which however might or might not end despite good economic reasons but strong political pressure which is caused by raging inflation which is at historic lows for a couple of years....
To keep it simple. The U.S economy looks quite bad for labour, far better for shareholders or the 'rich' but overall vastly superior to many European ones in which austerity whips dying horses closer to the happy hunting grounds. Japan has done rather well thanks to brave Abenomics which obviously wants higher inflation expectations and takes gladly a weaker yen. China is still growing strong, even if 'just' under 8% and in India and Brazil and quite a few other developing countries the consumers are consuming more and more. The world economy should grow over 2% and that despite the drag of recession big Europe.
All in all bonds still look deadly, money is a sure loss in purchasing power and I got housing pretty well covered. So stocks it is and it will remain this way for quite some time. The dividends after tax are beating the inflation pretty handily. Today I invested into a MSCI China ETF and Lanxess. I'm pretty sure that both will give me good returns over 5 years.
The Chinese are slowly tackling the problems on their equity markets, hopefully the big heads of the party understand the need to solve those problems. Right now so much money flows into housing that and additional basin would be highly welcomed. Overall I have considerable faith into the average Chinese guy trying to do well.
Bookmarks