Monday, March 7, 2011

Is there more room for the bull to run?





















So where do we go from here? As we approach the 2nd anniversary of the bull run, are we headed for a dip in the market or does the bull have legs to push for a 3rd year?

The fears that the US and other major economies may fall back into recession, with economic growth slowing down and lead indicators slowing (
such as composite indices such as the S&P 500, unemployment rate, GDP, or the inflation rate) but if this were too happen then we could prolly see more money flowing into the US with further quantitative easing but as my colleague would say slow growth doesn't mean no growth, where do we go from here? i will address some sectors which could reap potential " harvest "

Another issue has been the major outflow of funds from emerging markets into developed markets, showing changes in investor appetites but why such a major outflow especially since emerging markets have been one of the main driving forces of the recovery?

Also things seem a little unsettling now, with China's inflationary measures, further geopolitical issues within the middle east as riots sweep through from egypt onto libya and worries that it may spill over the borders of saudi arabia.

Libya, which has Africa's largest oil reserves and is the continent's fourth largest producer, is a member of the Organization of the Petroleum Exporting Countries(OPEC), the cartel that produces about 40 percent of global supplies.

Saudi Oil Minister Ali al-Nuaimi said OPEC was prepared to meet any shortage of supplies due to the crisis in Libya, as they have enough reserves and that there is more than enough and no shortage only concerns and fear.


But these are things that we already know and issues that have been
factored into the market even thou oil has been holding the market as hostage we still seem to have a strong support for equity prices and once this tension dries up, we can expect markets to zoom ahead.

So with which sectors can we expect to see leading the bull market in its third year of life?

Thing have been looking good for the agricultural sector, the prices of these commodities are driven by a host of factors all over the world — and this year, a far wider range of conditions than usual are impacting the markets.

The question is, given the recent upward trend in agricultural commodity prices and the fundamental factors currently in place in the industry, how does the average investor best take advantage?

An investment in agricultural commodities can work well within an already well-diversified portfolio, but may offer too much risk for the typical investor as a stand-alone investment.

Still, given the current supply-demand fundamentals, the farming and agriculture sector provides fertile prospects for those with the insight to plant the right seeds and the patience to cultivate them properly, letting them grow into a bountiful harvest.

Happy Investing all.


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