Sunday, October 2, 2011

Bears vs. Bulls

During the years between 1926 and 2010, there was an incredible growth for investors in the U.S. stock market. The estimated growth was 9.1% annually. The stock market is usually the best way to increase individual wealth over time. Unfortunately, this is not the case in 2011. The financial policies of the current president and his administration have caused the stock market investments to fall out. The third quarter of 2011 has been the worst in recent memory for the U.S. stock market. Confidence is a key component for all investors and the bottom line is that American investors are investing outside the U.S. stock market. The most popular investments are cash, commodities, and the U.S. treasury bonds. Another issue is that the baby boomers, born from 1946-1964, are starting to retire and will not invest in risky stocks and will more likely sell stocks to finance their golden years. The current term used for the stock market is called the “Bear Market”. The financial cost of the “bear market” is that there is less investment and a decrease in stock prices. The benefit is that the investor can buy stocks at a much lower price. The upside turn of a stock market is called a bull market. In conclusion, with a new presidential election in a little over a year, I feel that the country will move in a new direction with a bull market system soon to return.

No comments: