Rainer's Investment Insights

Stock Market Divergences The curious thing about divergences is they can last for months, sometimes even years before they dissolve and turn into one big market convergence again. As long as one economy, - the US -, is the global leader, a return to correlated markets is what most parties wish for. Divergence occurs - as an exception, when regional economies are running into headwinds - by plan or by chance. Few people are able to predict the exact time of change from divergence to convergence, but - stock market cycles, seasonal behaviour, even statistics can become the proverbial "straw that breaks the camel's back". If we just knew, which one! Therefore, we reluctantly accept that there is no ONE measure tape, which tells us for sure, when a stock market rally comes to an end, BEFORE it happens. Divergence Pictured: Over the last 2 years, the divergences in trend between the US stock market and the rest of the world could hardly be any starker: Source: Yah...

STOCKS RUNNING OUT OF STEAM... Investors keep telling me that their portfolios did not perform, while markets seem to have run up to new highs month after month.  Is that a fair assessment? Just a reminder to the reader: My investment strategy is medium term say 3-6 months, i.e. short term (days or less) consideration are really only important to me when I look to make changes to a portfolio. Anything said in this blog, be it outlook or forecast does not refer to tomorrow or end of the week. I only talk about the next 6-12 weeks' financial market probabilities and how I intend to trade. For more on my strategy please go to this page. Global Indices To check what happened over the last 12 months or more, I'd like you to take a look at the sample charts from the US, Europe and Asia in their respective currencies. US indices S&P 500, 1-year view, 2 major corrective moves; source: chartnexus S&P500: The large caps were favourites for many years but i...