Many market experts and investors sense the US economy
may in fact pick up in the second half of this year. "Much of the
decline we've experienced is likely over in our opinion. We believe the
worst is over and we could see the market work its way higher,"
says Sam Stovall, a leading chief investment strategist and chairman of
the investment policy committee at Standard & Poor's.
Some experts believe the current backdrop of scary headlines is creating
opportunities. Warren Buffett's famous saying - "be fearful when
others are greedy and greedy when others are fearful." Lately
Warren Buffett, the world's richest person said, "this is not a
field of specialty for me, but my general feeling is that the recession
will be longer and deeper than most people think." Buffett made his
comments after his Berkshire Hathaway agreed to invest $6.5 billion in
the takeover of chewing gum maker Wrigley by Mars in a $23 billion
transaction. His comments may create more investing opportunities.
The Fidelity Investments Millionaire Outlook survey, involving more than
1,000 respondents, found that 27 percent of millionaires plan to raise
their exposure to stocks within 12 months. Only 7 percent had plans to
decrease their stock holdings during the same period. A year ago
millionaires were cautious when predicting the economy for 2007, which
proved during the second half of the year. Now they feel more
optimistic, though they are concerned about the presidential election.
While many economists believe the USA is in a recession, the expectation
is that it will be a short one ending this summer and the stock market
may recover soon. However, stock investors should be cautious in
selecting stocks because some companies may not perform well due to poor
macroeconomic data. The US economy grew by only 0.6 percent in 1st
quarter of 2008. "The economy is weak but not collapsing,"
said Lynn Reaser, chief economist at Bank of America's Investment
Strategies Group.
