Monday, October 25, 2010

How long will the current stock market rally last?

As correctly predicted, the stock markets are in rallying mode. How long more to go?
According to Mark Mobius, "these bull-market runs can last for years." Adds DBS Carbon, "The liquidity rush into Asia has only just begun. Quantitative easing is not something that will be switched off. I believe that these inflows are going to pour in for a long, long time." Famed investor Jim Rogers agreed, "I suspect that there will be continued improvement in the global economy because there is so much money being printed. However, he warned, "Eventually, there will be a massive bubble here in Asia as well and we know all bubbles end in tears, and this one won't be different." When will this bubble burst? No one knows (someone warns it could take 12-18 months), but for now, enjoy the party while it lasts.

Therefore, make hay while the sun shines. I am of the opinion that we are still at the start of the bull run, but the market may from time and time again, be subject to shocks from events in the developed world. Still, I will be a net buyer of mostly blue chips on dips, and take profit on rallies over the next couple of years.

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