time to pull the plug on shares?, page-3

sushi

I think mid to late 2013 could be a very good time to get back into the share market - at least for another run up lasting several months.

The US market, which basically drives world sharemarkets, has had a huge bull run off the 2009 low and is now stale. An analyst on CNBC reported that 88% of 2012 profit gains by US companies (I suppose that was S&P500) came from only 10 companies, which included Apple but also several of the companies that had been beneficiaries of the govnut stimulus packages (especially the big banks).

Given that the US market needs an extended rest there is little chance our market will do much unless China does a massive stimulus or perhaps QE4 (likely to be announced in December and introduced next year) could be the catalyst for some inflation that will make commodity shares attractive for a while.

The Shanghai market is pretty corrupt (ie you can not trust the company reports and many companies have razor thin or no profit margins) so even the locals are fed up with it. It will be a long time before world markets are influenced by the Shanghai markets the way they are by the NYSX. The Tokyo market may take off for a while on the basis of new stimulus/CB printing if the Abe led LDP win the next election.

The safest bet is to be mostly on the sidelines for now and to watch developments for better entry points. I read that in the first and second year of a re-elected President's term the US market is negative and most of the gains of the second term are made in the third year of the presidential term.

Good luck in the commodity markets, which I do not know how to trade.

loki (still partly invested in goldies.)