Overall, World is living in a very incertain environment. A few years ago politicians could easily predict the economy in a period of 3/5 years. Nowadays, nobody could imagine global economy in a question of weeks!
So, investors must be prepared to change their stratagies at any moment. Closed ideas could be a step to abyss.The stratagy: BUY AND HOLD is over. And I suspect... definitely!
At the present time, markets seems to have a neutral trend. Yet, that could change in just a second!
In fact, Western economies scenario is something like this: indebted governments, families and companies, growing inflation, expensive energy, illness banks, lack of confidence, serious social tensions, high unemployment...
So, with such a scenario could anyone expect strong gains in stock markets? Only a very optimistic person! Besides, we saw a good high leg on 2nd half 2010, and Dow Jones is not far from 2008 highs... I think US stocks are clearly overvalued. I prefer French or Germany companies: BNP Paribas, L'Oreal or LVMH are among my favourites. But, with small accounts I prefer speculative small/mid caps.
I also like a few Portuguese companies! Yes, that's right! I said "Portuguese"! Why? Take a look to their ratios! Dividends! And their exposure to Brazil.
I'm cautious on oil and extremely cautious on gold. it's true dollar have been sinking, but it could't sink forever... Gold is trading near historical high levels and, besides new inflation fears, seems vulnerable to a strong correction! Don't forget the example of silver!
On the other hand, a possible default in Greece could work as an "atomic bomb" on markets, sinking euro, climbing dollar and crashing commodities...
Best luck to all competitors,
