In short, all of the developed world is awash in a never-ending sea of debt. What does all of this debt mean? Why are nations, individuals, and companies so highly leveraged? When will the great day of reckoning come for all of this debt?
There are clearly no easy answers, but a growing awareness of these issues have made many investors more aware of the safety and value of hard assets like gold, silver, farmland, and diamonds. While there is no gaurantee that hard assets will continue to rise in value, it is clear that many nations will continue to print money to pay off debt or at least the interest on their debts versus cutting expenditures.
As for the stock markets, we are seeing a clear Christmas rally but are struggling with the 200 day and 50 day MA’s — What I would do here is stay neutral until all of the moving averages are cleared to the upside at which point some traders may want to “rent” the market for a X Mas rally. Personally, I am more skeptical of the debt issues in Europe than most investors and think that risk management, a heavy cash weighting, and blue chips are the place to be…
Consider these stocks for the long run:
Also, consider selling covered call options against your long positions in these names… The added yield will compensate your conservative positioning in the marketplace.