The VIX is trending down, investors are looking at their cash yielding 0%, and the world looks as though it might emerge later this year. What is a good investor to do? Buy, of course!
So says the market. My concern is that the financial crisis and related recession have scared the consumer witless (not withstanding having also destroyed his wealth and taken his job), and convinced the patient they need to live their lives a little differently (which incidentally is a good thing).
Recovery may be taking shoot, but it is going to be subdued as it faces a cavalcade of transitional headwinds (deleveraging US consumer, more cautious attitude toward risk, higher taxes, a moribund financial sector, govt funding issues). Look to the lost decade for guidance.
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