Shares rally
For few days in a row, shares in stockmarkets have been rallying. Is there any logic in this?
Governments are borrowing at a record breaking rate. Unemployment, and recession are also progressing at record breaking rates.
China is also seeing some effects of the economic downturn - making it truly global.
Surely it's not the time to be investing in equities.
But then what can one invest in? Property is illiquid, so you can't react if the market turns worse. Interest rates are zero so you can't be keeping cash or government bonds. Gold is generally overpriced in what analysts have started calling the next bubble. Long term investments are also not to be considered with such volatility and uncertainty.
More and more investors seem to be turning to trading shares, or share derivatives with inherent margin. They either buy like mad, or sell like mad, and change their minds every day based on market sentiment. This is pure speculation, with no reference to any underlying fundamentals.
Could this signal the bottom of the market, the beginning of a new bubble, or just vain attempts to make bit of money while you lose what's left?