The U.S. stock markets are acting as a safe haven to the European Sovereign Debt Crisis. History is repeating since the same took place between 1932 and 1937. A growing sense of unease with European ability to sort out their affairs is sending capital to American blue chips companies. Investors wishing to protect their nest eggs are purchasing shares and taking delivery of the physical stock certificates.
As long as investor participation remains subdued, the market has the fuel to head to higher levels with setbacks now and then. Only when bullish consensus approaches 90% like in the Japan in 1989 or the Dot Com Bubble is caution necessary. In a recent survey by Central Banking Publications and Royal Bank of Scotland Group Plc of 60 central bankers this month, 23% said they own shares or plan to buy them. This marks a sea change post-WWII in terms of the risk-free status of government bonds.
"Now seems like a great time to invest in the stock market, which has continued its bullish ways this year. But then why has stock ownership reached a 15-year low?
Gallup’s annual Economy and Finance survey, conducted April 4-14, found that only 52% of Americans currently are playing the market. That’s the lowest rate since at least 1998, when Gallup began tracking stock ownership. Even that figure is deceptive because about half of Americans who do own stock do so only through pension funds, mutual funds and other accounts they don’t control.
Meanwhile, the Dow Jones Industrial Average reached 15,000 recently, for the first time ever..."
Read more:
http://www.allgov.com/ne...-low-130510?news=849984