Oliver's Insights - Continuing recovery, but still a long 'worry list'
7 April 2011 - This note takes a look at the worry list for investors.
The key points are as follows:
- After relative calm in financial markets from September to February, it seems the worry list for investors has blown out again to include: Japan, oil prices, inflation, China, US housing, the US Federal Reserve's exit from easy monetary policy, European debt problems and high US public debt.
- These might all result in bouts of volatility, with the US Federal Reserve's eventual shift away from easy monetary policy being the key worry to watch. However it's unlikely these worries will be enough to prevent decent gains from shares over the year ahead.
- In some ways having a few worries is healthy because it stops investors from becoming excessively exuberant and suggests there are still investors sitting on cash who can enter share markets over time, providing fuel for further gains.
