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Is the end of the stock boom threatening? – TGI Financial Partner Blog – News and News from the financial world


The US stock market is buzzing , according to recent surveys by “Investors Intelligence”, equity investors are as optimistic as ever. Even at the turn of the millennium, at the height of the hype surrounding new Internet and technology assets, there were more pessimists on the market. At present, many investors consider stock speculation to be self- perpetuating with guaranteed price gains and hefty dividends . Accordingly, securities speculation in the United States has reached a new record level of approximately $ 445 billion .

The “bullish” sentiment is fueled by two factors: investor confidence in the omnipotence of the central bank and the seemingly positive earnings performance of American companies.

 

Price increases are based on buybacks

Price increases are based on buybacks

Meanwhile, however, the voices of the stock market experts are increasing, warning of an imminent end of the bull market. They attribute the recent increases in the profits of S & P 500 listed companies not to a real increase in business volume but rather to a reduction in the freely tradable equity offering .

Last year, the company bought from the S & P 500 back own shares worth a total of about 500 billion dollars. Many financed the share repurchase credit, the debt of US companies thus achieved a new high.

While leading US executives continue to be optimistic about the development of the stock market, various inside barometers show a different trend . According to this, the corporate executives privately use the high share prices for the massive sale of their own shares . Obviously, they do not believe in the continuation of the stock market boom.

 

Current risks for the stock market

stock market

The current forecasts for the development of the world economy predict global growth of 3.7% (Europe + 1% and USA + 2.8%), but the IMF once again bases its forecasts on the unsaturated markets in Asia, Eastern Europe and the US Latin America. However, major emerging economies such as Brazil, Turkey, Indonesia and South Africa are showing signs of serious economic problems . The forecast of the IMF could burst like a soap bubble . Even the Chinese economy is unlikely to grow as dynamically in 2014 as it has in recent years. From the Middle Kingdom threatens a particular threat to the stock markets – a huge credit bubble . It has grown from $ 14,000 billion to $ 23,000 billion in 5 years .

The stock market may be nearing the end of a long bull market, so if you want to get started now, you must take considerable risks . Against this background, the investment in precious metals , such as gold, becomes more interesting again. The gold market has seen massive falls in prices over the past year, with many gold mutual funds completely dumping their shares into the market and putting a price down. If the stock markets crashed in 2014, the demand for gold would skyrocket again, so it might be worth buying gold now.

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