Here is an interesting excerpt from an article by Puru Saxena,...

Here is an interesting excerpt from an article by Puru Saxena, tilted "Birth of a New Cyclical Bull?" in which I am in agreement.

BIG PICTURE - "Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria" - John Templeton, Founder of Templeton Funds

The coming year may go down in history as a bullish one. After the shocking asset-liquidation witnessed in 2008, the following 12 months are likely to provide above-average investment returns. Given the negative economic news and awful investor sentiment, my assessment may sound absurd but it looks as though the bear-market ended late last year and we are now in the early stages of a new cyclical bull-market. Below are some of the reasons why I believe the skies are clearing for a 4-5 year bull-market:

• Surging liquidity - central banks have pumped trillions into the banking system
• Low-interest rates - yield on cash and cash equivalents is at a historical low
• Declining corporate bond yields- risk appetite is returning
• Declining Ted Spread - inter-banking lending rate has declined, a positive sign
• Low valuations - various stock markets are trading at very attractive multiples
• Horrendous investor sentiment - a contrary bullish indicator
• Volatility has peaked - VIX has topped out and is falling
• US Dollar rally has ended - bullish for the markets
• Global stock markets are making higher lows - sign of base building
• Huge amount of cash on the sidelines - US$8.85 trillion or 74% of US market cap