I don't really see much of a difference this year. Fundamentals ARE improving, but uncertainty is much worse. As it turns out, last year was clearly not as bad as many people expected it would be, but next year isn't (based on forward comments) looking all that good.
I'm keeping most of my larger holdings in equities (they are so far ahead of where I started anyway, the losses of the past 3 years, while painful, haven't hampered my long term assumptions for the market, which I feel remain quite good.
On the other hand, I've been hedging by dodging in and out of overnight trades (quite profitably, I might add). And I've kept my kids' money on the sidelines for the last 6 years (yes, in 1997 I thought the market was beginning to tire and I wanted to put them in at a point when they'd get the best run for their money...which will be soon). Based on their interest, they've outperformed virtually all major indexes during that period...LOL. Go figure.
Still, vast consolidations haven't begun yet. There were many in the last year due to bankruptcies, mergers, acquisitions, etc. (primarily bankruptcies, though). But now that fundamentals have improved, I think we'll see more buyouts and mergers this year. Unless there are more Enrons sitting out there. But I doubt that very much.
Once meaningful consolidation begins, the market will begin to get a better footing. |
