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Though it is not yet the right time to say that the US economy has completely recovered from the effect of the recession it is definitely showing signs of the recovery. Different experts have opined differently regarding post recession US economy and the trend that will prevail in the US stock ma

by Matt Horn Saturday, May 14, 2011
There are certain traits of the recession that is still prevailing at the US stock markets. This is one of biggest financial slow down since the great depression, in fact there are some experts who are comprehending this recession as more deadly and poignant than the great depression. The world's leading stock markets indices have not recovered from the sharp drop in 2009. The most fell Hang Sheng index 62.8%. Only the US NASDAQ index has exceeded the record level from 2007.

What is the current situation of the world's leading stock markets?

US stock market

DOW JONES

The DOW JONES index now (May 06 2011) reaches 89,7% of maximum value, which was reached Oct 12 2007. NASDAQ index 222.9% and at least increased Asian NIKKEI 225 index 139.7%.

May 06 2011: Only the US NASDAQ index has exceeded the record level from 2007 (by 0.6%).

Stock markets have not yet recovered from the large drop courses due to financial crisis. Developed countries are faced with unemployment, high public debt and rising oil prices. Underdeveloped countries most concerns grow of food prices. All these problems do not affect good on increase in consumption, which would mean more economic growth.

How does all this affects on the stock markets?

Investors who do not want to risk will have to follow the risk-spreading rules (combination risky and safe investments).

It seemed like the markets started off 2010 very similar to last year. Not quite as stressed out, but January and February were not, shall we say, stellar in terms of market performance. And then in March things came roaring back with a vengeance. So of course the big question now is, "Will the up trend continue?"

It's amazing what has transpired over the course of a year. We've gone from the deepest darkest days in recent market history to quite a significant rebound. It just goes to show you -- the market does what it wants to do.

We currently have money invested in three broad categories. US, International, commodities and currency - and in that order, that's how performance for the quarter kind of stacked up. The US markets did better than international, which did better than commodities and currency.

But they all made money!

Just about every individual position that we put in client accounts is showing profits for the quarter. More importantly, they are showing performance better than their overall market index or benchmarks. If we would have had 100% of monies allocated to the US, performance would have been stronger -- frankly a lot of that had to do with the strengthening of the US Dollar, which is good for US stocks but hampers performance of international stock.

We were concerned that the extreme volatility in the market back then would have caused false readings with our investment system indicators, but with hindsight benefiting us, we've seen that in fact our supply and demand system is quite robust and resilient. So we have more confidence now than ever before with our investment system.

It certainly helped us navigate through last year. It told us to start putting money back into the market rather aggressively in March of 2009 -- and that's at a point when things looked their bleakest as far as market performance.

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